this path over the past few months – one of the items on its “ to do ” list for 2016 is to finalise the basel iii reform package before the end of the year. and things are moving along swiftly – the fundamental review of the trading book ( frtb ) was endorsed by the central bank governors in january, which means that the new market risk framework will take effect in 2019. work is also ongoing to address the problem of excessive variability in risk - weighted assets by the end of 2016. the basel committee has set its sights on two outcomes : removing internal model approaches for certain risk types, and placing constraints on the use of internal model approaches for credit risk, in particular through the use of floors. in parallel, the standardised approaches for credit and operational risk are reviewed. another issue the committee is currently working on is the final design and calibration of the leverage ratio, so that it can be implemented as a pillar 1 measure by 1 january 2018. to make one thing clear : the regulatory projects mentioned do not target on imposing further burdens on the banks – which would mean first and foremost higher capital requirements. in that regard, i highly appreciate the overall impact study the basel committee will conduct this spring, which will give us precious hints on how all the regulatory measures interact and should be calibrated. i think the basel committee is on the right track, and finalising the basel iii reform package in 2016 is my regulatory priority in 2016. bis central bankers ’ speeches while we may rightly expect much of the basel iii framework, it is no secret that higher capital standards and new liquidity requirements are not the only toolkit available when financial stability is at stake. that ’ s why the basel iii regime has been flanked by a host of other regulatory projects that have been launched in response to the financial crisis : the “ too big to fail ” issue, sovereign exposures and the shadow banking system are just three regulatory projects i could name. this is neither the time nor the place to explore these regulatory projects in any great detail, of course. but there is one point i really would like to stress. all the regulatory projects i mentioned just now call for international cooperation – and not just on the basel committee for banking supervision or the financial stability board, where it works very well. if we as national regulators do not coordinate our approaches to regulation, we will create a fragmented financial system that opens up vast opportunities for regulatory arbitrage. so working together – as regulators

non - performing loans in the future as well. the proposals that were recently made by the ecb in this regard strike me as a sensible way forward. 5. conclusion ladies and gentlemen let me conclude. after all, i would not want to evoke the feelings that a doctor once gave to a patient who craved 4 / 5 bis central bankers'speeches immortality. the doctor informed the patient that immortality was beyond the reach of medicine, but the patient was insistent : " is there nothing i can do? " the doctor replied : " well, there is one thing. you could marry an economist and move to north dakota. " " and that will make me immortal? " " no. but that way, even six months will seem like an eternity. " i thank you for your attention and wish you all a stimulating discussion. 1 auer, r, c borio and a filardo ( 2017 ), “ the globalisation of inflation : the growing importance of global value chains, " bisworking papers 602, bank for international settlements. 2 draghi, m ( 2015 ), “ monetary policy and structural reforms in the euro area ", speech from 14 december 2015 3 czernich et al ( 2011 ), broadband infrastructure and economic growth, economic journal vol 121. 4 asdrubali, p, b e sørensen, and o yosha, “ channels of interstate risk sharing : us 1963 – 1990 ", in quarterly journal of economics, 111 ( 4 ), 1996, pp 1081 – 1110. 5 allard, c, p k brooks, j c bluedorn, f bornhorst, k christopherson, f ohnsorge, t poghosyan and an imf staff team ( 2013 ), “ towards a fiscal union for the euro area ", imfstaff discussion note, 13 / 09. 6 adalet mcgowan, m and d andrews ( 2016 ), “ insolvency regimes and productivity growth : a framework for analysis ", oecd economics department working papers no 1309. 7 german council of economic experts ( 2017 ), “ towards a future - oriented economic policy ". 5 / 5 bis central bankers'speeches