role in the u. s. and global financial systems. 7 this is an area that, in relative terms, has recently experienced stress events as in the september 2019 repo market stress, and the so - called “ dash for cash ” in march of 2020. these events raised concerns about the resiliency of u. s. treasury markets. even today, some indicators signal low market liquidity through market depth in u. s. treasury cash markets, which have been at levels below historical norms. 8 see financial stability report, 9 – 10. figure 1. 11 in financial stability report, 10. - 9banks play an important role in providing liquidity, and there are clear signs that liquidity in treasury markets is low. 9 while there may be a number of reasons for reduced treasury market liquidity, i would note two specific factors and ongoing risks : ( 1 ) concerns by banks about balance sheet capacity to engage in low - margin market activities, and ( 2 ) the cumulative regulatory burden on banks when they engage in market - making activities, which includes most recently the proposed increase in capital costs for market making activity proposed by the basel iii endgame rulemaking, and an apparent lack of interest in addressing the constraints on bank activities caused by bank leverage ratios. ultimately, liquidity in the u. s. treasury market has the potential to amplify or dampen shocks to the financial system. where we can take proactive regulatory measures to ensure that primary dealers have adequate balance sheet capacity to intermediate treasury markets in times of stress, we should do so. this could include amending the leverage ratio and g - sib surcharge for the largest u. s. banks. and where we can take into consideration the impact of regulatory reforms on financial stability, we must at least acknowledge the tradeoffs and the potential downside risks that regulatory changes could create. this is particularly important when considering significant increases to capital requirements, especially those of the scale contemplated by the basel iii proposal, including the market risk capital increases. adopting regulatory changes to mitigate these concerns may not be sufficient to promote market liquidity, but it would be an important step toward building resiliency in advance of future stress events. in my view, it would be better to fix the roof now, while the sun is shining, by addressing over - calibrated leverage ratio requirements and moderating capital increases for the basel iii proposal. see financial stability report, 9 – 10. - 10 unintended

been initiated for the voluntary publication of material about individual countries. sweden has promised to participate in the project. transparency also applies to the individual countries and the private sector. one element in the recent crisis has been a misleading account of both private debt and the size of foreign exchange reserves in a number of countries. the standard for countries wishing to participate in the international capital market — the special data dissemination standard — is being revised to give a better account of the level of foreign reserves and the debt position in individual countries. at country level, moreover, a code for monetary policy transparency and measures for maintaining financial stability is being drawn up by the imf together with the bis, central banks, supervisors, the world bank and the oecd. a fiscal policy code is already in place. 4. managing future crises even with these measures, we have probably not yet seen the last financial crisis. a readiness for the management of future crises therefore needs to be created. a central issue in international discussions is the distribution of risks among the parties concerned. while the imf has been provided with additional financial resources, it neither can nor should be prepared to contribute the main part of what may be needed in a crisis. this is because expectations that any costs will always be carried by someone else can result in an overall increase in exposure to risks, the problem of moral hazard. such expectations are liable to drive up credit supply and demand and can influence private agents as well as national policy - makers. one way of dealing with moral hazard among private investors is to arrange for them to carry a larger share of the burden in a crisis. at the same time, there has been an ambition to construct any measures so that they do not have larger negative consequences later on, for instance by deterring banks from providing desirable credit. these two perspectives are liable to conflict. the discussion has focused on preparatory measures as well as steps that can be taken in more extreme situations. as regards the preparatory measures, it has been proposed, for example, that bond contracts be constructed so that the renegotiation of scheduled repayment can be authorised by a majority. another proposal is that capital adequacy standards be constructed so as to limit the proportion of short - term interbank credits from industrialised countries to emerging markets. recently, moreover, a decision was reached on contingent credits to countries that are judged to have a sustainable economic policy and have nonetheless been hit by a loss of confidence and liquidity. this is intended to reduce contag