international standards. but importantly, in all cases the assessment process also generated a number of changes to the domestic regulatory framework to fill gaps and improve the alignment with the international standards. this shows that a peer review programme, coupled with transparency, can make an impact even without a suite of legal powers to back it up. overview of assessment outcomes table 1 assessed member publication date of number of regulatory changes, overall assessment jurisdiction assessment amendments, and clarifications grade made by a member jurisdiction during the assessment japan october 2012 compliant singapore march 2013 compliant switzerland june 2013 compliant china september 2013 compliant comparability of bank capital ratios over time, the consistent national implementation of basel iii standards will help ensure greater “ truth in advertising ” when comparing bank capital ratios. it is important that, when a bank publishes what purports to be a basel iii capital ratio, investors and counterparties can be reasonably sure that the ratio has been consistently calculated and that, if there are differences, those differences are transparent and some measure of their materiality is available. but there is more to bank capital calculation than just following national regulations. the current framework makes use of internal models – these were introduced in 1996 for market risk, and in 2006 for credit and operational risk. the rationale was clear : to provide incentives for improved risk measurement, and reduce arbitrage via greater risk sensitivity. the basel i framework, established in 1988, had grown outdated and was increasingly subject to arbitrage. given its limited risk sensitivity, it provided banks with incentives to accumulate risk, as the build - up of many risks would not be visible in banks ’ capital ratios. in the current framework, internal models provide an important means of generating the increased risk sensitivity that is regarded as essential. making capital adequacy ratios more risk - sensitive should, in theory, also make them more comparable. capital adequacy assessments are about measuring the adequacy of capital relative to the risks a bank is taking. measuring capital, ie the numerator, is relatively easy. the denominator, ie risk, is a much more slippery concept, and a certain degree of sophistication and complexity is needed to measure it. but by enhancing the accuracy of risk measurement, we should be making capital adequacy ratios more comparable and reliable, both over time and between banks. bis central bankers ’ speeches as an aside, let me clarify that this is no criticism of the leverage ratio as a regulatory tool. it is

from the following list : most immediately, we will see supervisory action. our benchmarking work has, for the first time, given supervisors meaningful information on international benchmarks against which they can compare their domestic banks. many supervisors are responsible for only a handful of irb banks, and it can be difficult to generate reliable benchmarks from a small sample. but our studies have provided supervisors with a much clearer picture of how their banks stack up against their international peers, and supervisory action is already being taken against a number of the outlier banks that are on the low side. similarly, the committee ’ s rcap jurisdictional assessments are having an impact by reducing variability due to undesirable differences in national regulations. these may often seem to be small issues of technical detail, but they can have a material impact on capital outcomes. to the extent these differences are removed, they can add to the consistency of outcomes. the committee is also looking at the issue of national discretions and pillar 2, and it is investigating whether more can be done to reduce variability from these sources by elinimating discretion where possible, and strengthening supervisory guidance on model validation, review and approval. since transparency ( or lack thereof ) of bank modelling practices is at the heart of the problem, during 2014 the committee plans to propose enhancements to pillar 3. the aim is to provide banks ’ external stakeholders with information to better understand banks ’ risk profiles and risk - weighted asset differences. but it is unlikely that disclosure can be the sole response, and, thus, this initiative will have to be flanked by other measures targeted specifically at practice - based deviations. our latest policy proposals stemming from the fundamental review of the trading book were released at end - october, and incorporate a number of proposals that flow directly from the findings on practice - based variation in the trading book. for example, certain modelling choices with respect to the choice of stressed periods and the scaling of short - horizon estimates to longer horizons have been constrained in the latest proposals, along with more gudiance on expected supervisory practices. more generally, within the policy framework, we are looking at how far greater constraints on the modelling practices of banks are needed. this could involve enhancing the data requirements on which models are built, limiting certain modelling assumptions or techniques, and / or strengthening validation requirements. to make a more direct impact, we are also examining the role of floors and benchmarks within the regulatory framework. floors are not a new phenomenom in the