percentage point increments ( 1. 0 %, 1. 1 %, 1. 2 %, etc. ) - 13 - framework. the goal of the countercyclical capital buffer is to build buffers in good times to help prepare for bad times. as called for under our current ccyb framework, i would recommend that the board activate a positive buffer if macroeconomic conditions suggested that it would be appropriate. conversely, where times of stress would justify lowering capital buffers, we will consider taking accommodating actions as we did in the midst of the covid - 19 crisis. calibration of the enhanced supplementary leverage ratio as part of the holistic review, i have also evaluated whether to adjust the enhanced supplementary leverage ratio. while we should continuously improve our riskbased capital requirements to reflect our understanding of risks, experience has shown that there will be times when banks and regulators are unable to accurately measure all risks. that is why regulators have adopted a leverage ratio, which compares the amount of capital held by banks with their total assets. leverage requirements do not vary based on risk - weighted assets. they provide a simple, transparent measure of solvency that is useful to banks, markets, and regulators, and a floor on the risk - based approaches. yet problems can sometimes emerge if leverage ratios are the most binding of the capital requirements because then banks may have an incentive to do less low - risk, low - return activity, and to engage in higher - risk, higher - return activities. some have argued that when banks are close to the eslr as a binding constraint that it has reduced treasury market intermediation. the evidence on that is inconclusive. to the extent it matters, the revisions in risk - based capital requirements i discussed today would mean that the eslr generally would not act as the binding constraint at the holding company level, where treasury intermediation occurs. to the extent that there - 14 - are problems with treasury market intermediation in the future for which the eslr might matter, the board could consider an adjustment. long - term debt a related proposal will be to introduce a long - term debt requirement for all large banks. long - term debt improves the ability of a bank to be resolved upon failure because the long - term debt can be converted to equity and used to absorb losses. such a measure would reduce losses borne by the federal deposit insurance corporation ’ s ( fdic ) deposit insurance fund, and provide the fdic

on shock, that their economic model was incomplete, or worse, has arguably emerged in the region. as a consequence, many of the leaders of these countries and their economic advisors are endeavoring to move their economies much more rapidly toward the type of economic system that we have in the united states. the imf, whatever one might say about its policy advice in the past, is trying to play a critical role in this process, providing advice and incentives that promote sound money and long - term stability. the imf ’ s current approach in asia is fully supportive of the views of those in the west who understand the importance of greater reliance on market forces, reduced government controls, scaling back of government - directed investment, and embracing greater transparency - - the publication of all the data that are relevant to the activities of the central bank, the government, financial institutions, and private companies. it is a reasonable question to ask how long this conversion to embracing market capitalism in all its details will last in countries once temporary imf support is no longer necessary. we are, after all, dealing with sovereign nations with long traditions, not always consonant with market capitalism. there can be no guarantees, but my sense is that there is a growing understanding and appreciation of the benefits of market capitalism as we practice it - that what is being prescribed in imf programs fosters their own interests. the just - inaugurated president of korea, from what i can judge, is unquestionably aware of the faults of the korean system that contributed to his country ’ s crisis ; he appears to be very strenuously endeavoring to move his economy and society in the direction of freer markets and a more flexible economy. in these efforts, he and other leaders in the region with similar views, have the support of many younger people, a large proportion educated in the west, that see the advantages of market capitalism and who will soon assume the mantle of leadership. accordingly, i fully back the administration ’ s request to augment the financial resources of the imf by approving as quickly as possible us participation in the new arrangements to borrow and an increase in the us quota in the imf. hopefully, neither will turn out to be needed, and no funds will be drawn. but it is better to have it available if that turns out not to be the case and quick response to a pending crisis is essential.