with domestic monetary policy implementation. see institute of international finance ( 2008 ), final report of the iif committee on market best practises, july and committee on the global financial system ( 2008 ), cgfs ’ s report on central bank operations in response to the financial turmoil, july. similarly, both reports consider developing and maintaining the ability to accept foreign currency denominated assets, which is more complicated than maintaining a swap line but could support the efficient management of collateral by internationally active banks with multi - currency liquidity demands. to understand this, one should bear in mind that under normal conditions, cross - border mechanisms among the infrastructures of major markets allow private banks to move collateral where it is needed. however, in an emergency situation, standard transfer procedures may simply not be effective or quick enough and settlement may become a constraining factor. easing liquidity pressure for large internationally active banks by broadening the range of acceptable collateral may contribute to alleviating potential liquidity contagion risks in payment systems, where the bulk of activity normally comes from the largest players, thus having a positive influence on financial stability. however, it should be noted that accepting foreign currency collateral also implies additional legal and financial risks in the conduct of monetary policy operations. hence, this is an area where further work is needed. 6. final remarks let me finally offer you some concluding remarks. one year after its start, the financial market turmoil has not subsided. in fact, it has intensified over the past few weeks, prompting central banks to step up their efforts to inject liquidity in global money markets in order to keep short - term money market rates in line with their policy rates and to guarantee the smooth functioning of money markets, thereby contributing to preserving financial stability. while the continuation of the market turmoil does not allow us to draw lessons from the comfortable position of an ex - post assessment, the experience of the past year suggests that some key features of the ecb ’ s monetary policy framework – particularly, its ability to provide access to collateralised lending operations to a wide set of counterparties against a broad range of collateral and on a large scale – have served us well during these times of stress. similarly, increased cooperation among central banks throughout the turmoil, both through enhanced information sharing and collective monitoring of market developments and ( 2 ) by means of coordinated liquidity injections, have played an effective role in easing tensions at the short - term end of the global money markets and in instilling

institutions. equity capital is key to the stability of the banks as it constitutes their main buffer for absorbing losses. under the new rules, banks have to satisfy higher capital requirements in terms of both quantity and quality. since last year, these institutions have been required to hold cet1 capital equal to 4. 5 % of their risk - weighted assets. this was followed on 1 january by an additional 0. 625 % for the capital conservation buffer, which is set to rise to a total of 2. 5 % by 2019. from 2019, when it is possible for all instruments to be deployed in full, banks and savings banks will have to hold cet1 capital equal to at least 7 % of risk - weighted assets. this is a significant increase compared with the 2 % minimum ratio that applied until the end of 2013. what is more, the other new capital instruments, which include the countercyclical capital buffer and the additional buffers for the most significant institutions, also need to be backed by cet1 capital. the new rules will help make the banking system more stable as a whole. at the same time, however, it goes without saying that the new rules also place a cost burden on the banks. this is by no means unintentional in the case of buffers for the most significant institutions : as their systemic importance puts them at an advantage in terms of funding costs, this burden levels the playing field at least in part. however, some observers fear that this is also detrimental to the real economy. they argue that the new rules are making it more expensive for banks to lend and are therefore concerned that the institutions will be forced to reduce their lending activities in the future. the basel committee was well aware of the impact that the new rules would have. it was for this reason that the committee also established transitional periods with the aim of rendering it easier for banks and savings banks to make the necessary adjustments. these apply to both the qualitative and the quantitative aspects of the new capital requirements. for example, the capital instruments that are no longer eligible for inclusion in cet1 capital will not be excluded in one fell swoop ; instead, they will be phased out over a period of several years. furthermore, increasing requirements regarding the level of capital to be held will be introduced only gradually. but the basel committee has also come in for criticism in response to these transitional periods – in the eyes of some government representatives and market observers, they appeared to constitute too great a