plans must be finalised ; we must systematically remove remaining legal and operational impediments to resolvability, we must think through mechanisms to ensure firms have adequate funding in resolution, and we must ensure resolution regimes for systemic non - banks are as effective as they are for banks but make no mistake. brisbane will be the watershed in our collective effort to end too big to fail. bis central bankers ’ speeches building an open, global financial system fixing the fault lines behind the last crisis isn ’ t enough. the second objective of the g20 ’ s efforts is to rebuild trust in an open, global financial system. trust between financial institutions. trust between regulators. trust between industry and finance. and most fundamentally, trust between the public and the financial system. that trust is essential to maintaining a truly global financial system that integrates all major economies. only that system can serve all economies. only that system can support the investment and trade necessary for strong, sustainable and balanced growth in advanced and emerging economies alike. trust can only be restored if completing one job isn ’ t equated with downing tools. policymakers must now begin to look beyond how they will reform the core of the system to how they will regulate and supervise it. that approach has three elements. first, intensive co - operation. that is essential if national authorities are to continue to resist temptations to safeguard markets unilaterally through ring - fencing, compulsory subsidiarisation or extra - territorial application of domestic rules. of course, national authorities need some scope to develop measures tailored to their own jurisdictions. circumstances sometimes differ across jurisdictions, whether because of the stage of an economy ’ s development, its degree of integration into the world economy, or specific features of a local legal system. but the impact of these measures must be monitored closely for spillovers to others and – where there are not detailed international standards – authorities must resolve cross - border issues by applying the principle of deferring to each other ’ s rules where those rules produce similar outcomes. the second involves rigorous and transparent peer review and assessment processes. that commitment is vital not just to ensuring that agreed standards are being applied consistently, but also to allow policies to be adjusted where material unintended impacts are identified. through such work we ’ ve already learned about unintended consequences, and are now addressing them. for example, we amended the liquidity coverage ratio to take into account unintended consequences under stress on core markets such as commercial paper and

to clarify that liquid asset buffers are there to be used in times of stress. we changed the leverage exposure measure, for example by recognising that cash variation margins are effectively pre - settlement payment of the fair value of the derivative. in doing so, we reinforced banks ’ incentives to centrally clear their clients ’ derivative trades. in other words, we simultaneously reduced bank leverage while increasing the robustness of derivative markets. bis central bankers ’ speeches and we ’ ve learned about the unintended consequences of prudential capital and retention requirements on the securitisation market. regulatory changes arguably treat asset - backed securities in ways that appear to be unduly conservative, particularly relative to other forms of long - term funding. efforts to rebalance these incentives are now a priority. as the bank of england the ecb have argued, there is a strong case for differentiating between securitisations that are simple, transparent and consistent, and those that are not. the regulatory treatment of those securitisations should reflect their lower risk profile. by making changes, policymakers are applying a mature approach. we ’ re learning and adjusting. we will continue to do so, in a thoughtful, open, and deliberative fashion. the third element of the new approach is turning our attention to new and emerging vulnerabilities. work to assess new market developments and co - ordinate responses will become increasingly important as macroprudential risks arise from outside the traditional banking sector. in some economies, such as the uk, the biggest risks are associated with the housing market, which is why macroprudential actions have been taken. more generally, as the fsb has recently concluded : “ there are increased signs of complacency in financial markets, in part reflecting search for yield amidst exceptionally accommodative monetary policies. volatility has become compressed and asset valuations stretched across a growing number of markets, increasing the risk of a sharp reversal. ” those risks arise against a backdrop in which assets managed by investment funds have reached almost 90 % of global gdp – more than two thirds the size of the commercial banking system. the growth of the asset management sector brings welcome diversity to financial intermediation. however, there must also be a focus, as there has been with banks, on the systemic risks it could create. although the sector is becoming more concentrated, the risks don ’ t simply arise from the size of asset managers. they arise from the