push forward, in our view, is that of crossborder supervisory coordination, particularly better information sharing between home - host supervisors should be warranted. this is particularly important as the current crisis shows that there is a need for home supervisor of global financial conglomerate and banks to recognizing that global bank ’ s local operations may be systemically important for the host economies. in closing, i would like to share with you what i believe are the key changes in our financial landscape, resulting from this global crisis. first, bank business model would likely become more conservative, placing less reliance on wholesale financing and use of leverage, while focusing more on risk management and higher liquidity buffer. consumers themselves would be more risk averse and prefer to stick with simple transactions and products. as mentioned already, regulatory framework would be strengthened, especially the use of macroprudential oversight that focuses on system - wide stability. as such, closer supervision of systemically important financial institutions, including non - banks, would be required. finally, the microprudential oversight would also be strengthened to rectify previously identified shortcomings, particularly the basel ii framework, corporate governance, and incentive misalignment. though it looks as if we could be in the process of creating a “ new world order ”, given what we have done so far in strengthening our financial sector resilience, i believe that this transition would be a smooth one and add further strength to our financial system. needless to say, a strong financial system is the backbone of sustainable economic growth in the longterm. thank you for your attention.

to guard against overreactions that could unnecessarily raise the costs of the intervention and potentially crowd out private agents. third, interventions should be targeted. a central bank should attempt to mitigate only those market failures that it is best placed to rectify. specifically, central banks should concentrate on liquidity disruptions which, by their nature, are not permanent. fourth, intervention tools should be well - designed for the job at hand ; that is, lending at a penalty rate to particular institutions is appropriate for institution - specific liquidity problems. market - specific liquidity problems should be addressed with market transactions at competitive prices. finally, when there are shortages of collateral, market transactions should be conducted in that collateral. 8 in these regards, along with traditional central bank tools, such as lender - of - last - resort arrangements, a range of facilities is likely necessary. each of these has distinct characteristics suitable for different circumstances. term purchase and resale agreements could be offered to any financial market participant with marketable securities as the basis for the transaction. this type of transaction would be most useful when liquidity premia in money markets were distorted and associated with widespread liquidity problems in a particular asset class or maturity. term securities lending would increase the supply of high - quality securities that could be used for collateral at times when such collateral was in short supply. the bank of canada is currently constrained in its ability to ease collateral shortages, however, legislation currently before parliament would address this issue. it could also allow for a direct exchange of less - liquid securities for those that are more liquid, thus reducing the incentive to hoard precautionary liquidity. term loan facilities could be most useful when liquidity premia in money markets were distorted because several financial institutions were facing liquidity shortages. fifth, and finally, interventions should not create further market distortions. transactions should, to the extent possible, take place at market - determined prices and under conditions that are aligned with those in the market. this limits the possibility that the central bank will crowd out the return of markets. this is an important point, on which i will expand. under most circumstances, central bank provision of liquidity should be priced at an auction, where prices are set competitively, so that funding markets for the assets involved would not normally be distorted. a well - designed auction process can help institutions avoid any stigma associated with the receipt of central bank liquidity and minimize the possibility of confusion about lending at rates that