financial sector reform crucially depends on the timely and globally consistent implementation of agreed policies. as major reforms to address risks and strengthen regulation across the financial system have been adopted, it is becoming increasingly important to ensure that countries live up to their commitments. by means of peer pressure and transparency, we have to make sure that the measures necessary to improve the stability of the financial system are actually put into practice. a number of steps to ensure effective and timely implementation of internationally agreed reforms have already been taken. the results of numerous monitoring exercises are summarised by the fsb in regular scoreboards and public progress reports to the g20. in order to enhance the effectiveness of implementation monitoring, the fsb and important standard setting bodies have jointly established a coordination framework for implementation monitoring. in addition, the fsb monitors the implementation and effectiveness of international financial standards and policies via its peer review programme. peer reviews are an important tool to promote consistency, enabling fsb members to engage in dialogue with peers and share lessons and experiences. it is necessary to continue on this path. 6. closing remarks allow me to summarise : firstly, ongoing stress in the financial system and a weak economic recovery in many countries is no excuse to weaken our commitment to financial sector reform. secondly, today ’ s interconnected financial markets cannot effectively be regulated nationally. close international cooperation is warranted. thirdly, we must strike the right balance between achieving a level playing field and providing sufficient flexibility for the peculiarities of national financial systems. finally, rigorous implementation monitoring will be indispensable. as the old saying goes : trust, but verify. bis central bankers ’ speeches

’ s financial system differ, sometimes significantly, i do not think it to be appropriate to apply completely identical rules to every country or region. we must strike the right balance between providing a workable level playing field and at the same time providing sufficient flexibility for the peculiarities of national financial systems. the leitmotif for financial regulation ought to be international consistency, not one - size - fits - all. a uniform set of rules and regulations would deprive us of the benefits of international regulatory competition. by this, i do not mean competition where countries are undercutting each other with ever laxer, but also ever more risky regulation. this would be equivalent to a bis central bankers ’ speeches race to the bottom as we would invite market players to arbitrage across divergent national regimes. by regulatory competition, i mean assessing the merits of regulatory approaches and measures undertaken by other countries and, if deemed appropriate, adopting these approaches and measures. in short – learning from one another. for instance, in the usa, the federal deposit insurance corporation, fdic for short, has gained an extensive wealth of experience in resolving failing financial institutions. in my opinion it would be careless for european authorities not to draw on the knowledge of their us colleagues when implementing their own resolution regimes. 4. need for international cooperation the work to develop a new regulatory framework for the international financial system is slowly but surely nearing completion. an example of what has been achieved through intensive cooperation is the new regulatory standard for bank capital and liquidity, commonly known as “ basel iii ”, or the comprehensive policy framework for dealing with systemically important financial institutions, sifis for short. yet, we can not at all be satisfied with what has been achieved. while rule - making at the global level is a necessary condition for financial stability, it is by no means a sufficient condition. rather, for the agreed reforms to be effective, they have to be translated into national laws and regulations. this must be done in a globally consistent manner and according to agreed timelines. here, we must significantly step up our efforts and cooperate as closely as possible. otherwise, we risk failing. let me illustrate this with three examples. 4. 1 solving the too - big - to - fail problem solving the too - big - to - fail problem will, without a doubt, constitute the litmus test of financial sector reform. the aim is clear : taxpayers should not again be stuck with the tab for financial institutions ’ failures. to