##ous things were happening around the globe. the bretton woods system had broken down, so had the smithsonian agreement. following the jamaica agreement of jan 1976, the flexible exchange rate regime had been officially endorsed. the european exchange rate mechanism was being conceived and would be introduced in 1979, to culminate in a single currency two decades later. 30. closer home, though the “ draconian ” legislations fera, enacted in 1973 and cofeposa, in 1974 were at their prohibitive peak, we had begun to emerge from the dark ages. the green revolution had taken roots mitigating the pressure on our bop for importing foodgrains and the remittances from the expatriates were buoyant. both put together, had eased our external sector management. since then, despite ups and downs, we have grown in strength in the management of our external sector, which in turn has catalysed our quest for growth and development. though much remains to be done, the achievements are not to be scoffed at. to mention just one statistic, the life expectancy at birth was 41 years in 1960, 54 years in 1978 and has gone up to almost 70 years at the latest count. 31. a vibrant financial sector is an inevitable part of a developed modern society. in due process of development of the financial sector, it culminates in seamless integration with the rest of the world. in the meantime, it is the responsibility of the regulators to steer the process in a non - disruptive and facilitative manner. i hope that we have achieved that to a large extent and i personally feel happy and proud to have played some part in that process. we are now ready for transiting to a more developed economy and advanced society. as the prime minister paraphrased walt whitman in his recent address to the us congress “ the orchestra have sufficiently tuned their instruments, the baton has given the signal, and ….. there is a new symphony in play ” i shall enjoy the music from my comfortable perch outside the burden of responsibility. bis central bankers ’ speeches 32. i wish the convention all success and would like to convey my best wishes to all the participants for whatever endeavours they may choose to pursue. thank you all. bis central bankers ’ speeches

requirements, reductions in the granularity of reporting requirements and a simplified form of the net stable funding ratio ( nsfr ). in deciding which areas could potentially be simplified, we must weigh up the benefits of regulation – that is to say, the preservation of financial stability – against the costs generated for the private sector. essentially, all regulations that are non - essential to effective supervision are up for discussion. conversely, that also means that many rules are not up for debate, however. as i have already mentioned, no concessions can be made, in particular, when it comes to the risk - weighted capital ratio, the leverage ratio or the short - term liquidity coverage ratio. 3 / 5 bis central bankers'speeches one other aspect, i believe, is particularly crucial. the business models of small banks are neither generally simple nor automatically low - risk – and that is especially true when seen in their entirety. a supervisory system that works according to the principle of proportionality therefore needs to be simple but also robust. financial stability must not be jeopardised under any circumstances. 5. finalised basel iii standard must be implemented proportionately for the same reason – that is, to strengthen financial stability – it is very important that we implement the recently finalised basel iii package fully in the eu. after all, that ’ s no less than we expect of the us and the other member countries of the basel committee. but as i see it, full implementation of the basel iii rules doesn ’ t mean that all banks need to be affected by these highly complex rules to the same extent. to recap, the basel standards are primarily aimed at internationally active banks. in this regard, member countries of the basel committee are free to apply other rules to smaller banks that are only active in their own home markets and do not pose a threat to international financial stability. and this is the framework we should largely use when revising the eu rules. for instance, when it comes to a review of the trading book, we at the bundesbank are in favour of retaining the simple, standardised approaches that are currently in place for small institutions with small trading books. although the new, complex standardised approach is all well and good for institutions that engage in substantial trading activity, i don ’ t think they are suited to locally based savings banks or people's banks. we also support the idea put forward by the european commission and the european parliament of excluding development banks from the scope of the crd /