topics related to the covid event, including our interim findings on the lessons learned. the findings of that report, to be finalized later this month, will drive our future work agenda. let me share a few of my own views on the key lessons learned. my first takeaway is that the global financial system entered the latest crisis more resilient than the last. although extraordinary support measures were still necessary to mitigate the impact of the covid event, the implementation of the g20 - endorsed reforms from the last crisis helped contribute to our shared resilience. basel iii, which has led to a near doubling of capital ratios since 2011, positioned banks to better absorb the macroeconomic shock. in addition, derivatives markets are safer with better transparency, central clearing, and margin requirements. my second observation from the covid event is the importance of policy flexibility for each of our jurisdictions. of course, baseline consistency across standards is necessary. but indeed, one size rarely fits all. our varied policy needs and tools make coordination even more important to achieving common goals and results. the global regulatory framework, done right, is like a tightly woven piece of fabric. it can get pulled in different directions at the same time, and it won ’ t shred or unravel. in times of crisis, the warp and woof of policy tools across the globe need to be woven tightly enough for the fabric of our financial system to withstand the stress, but flexibly enough that it will not tear. uncoordinated regulation can create flaws : gaps, fragmentation, and arbitrage opportunities, which are the types of defects the fsb strives to prevent. but excessively granular harmonization can create regulation that doesn ’ t jibe with the circumstances in a particular jurisdiction. we try to ensure that our members are weaving a strong fabric in concert. a third observation is that there are instances where policy may fail to have the desired effect. i 3 / 5 bis central bankers'speeches found banks ’ apparent reluctance to use buffers an interesting lesson from the covid event. some evidence suggests that banks may have been hesitant to use their regulatory capital buffers to meet credit demand ( despite the stated intent from supervisors that banks should use their buffers under stress ). this may be due to uncertainty regarding potential future losses or the wider market stigma that may result if a bank were to use its buffers. perhaps the extensive fiscal and monetary support provided to borrowers averted banks ’ need to

markdown on the companies'books, despite a lack of significant credit losses on these assets to date. the loss of value in the company's investment portfolios, which totaled approximately $ 18. 6 billion pre - tax, was primarily attributable to the insurance subsidiaries'holdings. this loss was a substantial contributor to aig's fourth quarter loss. the remainder of the fourth quarter loss was significantly associated with the mark to market of assets transferred to maiden lane ii and maiden lane iii during the middle of that quarter, losses due to accounting on securities lending transactions that occurred during the fourth quarter, impairment of deferred tax assets and goodwill, and other market valuation losses. at the same time, general economic weaknesses, along with a tendency of the public to pull away from a company that it viewed as having an uncertain future, hurt aig's ability to generate new business during the last half of 2008 and caused a noticeable increase in policy surrenders. in addition, these extreme financial and economic conditions have greatly complicated the plans for divestiture of significant parts of the company in order to repay the u. s. government for its previous support. would - be buyers themselves are experiencing financial strains and lack access to financing that would make such purchases possible. to address these weaknesses, the federal reserve and treasury, in consultation with management of aig and outside advisers retained by the federal reserve, announced on march 2, 2009, a plan designed to provide longer - term stability to aig while at the same time facilitating divestiture of its assets and maximizing likelihood of repayment to the u. s. government. the plan involves restructuring the current obligations of aig to the federal reserve and treasury, additional capital contributions by treasury, and continued access to federal reserve credit on a limited basis for ongoing liquidity needs of aig. under the plan, treasury will create a new capital facility that would allow aig to issue to the treasury up to $ 30 billion over five years in new preferred shares under the tarp as liquidity and capital needs arise. this brings the total equity support of the treasury to $ 70 billion. additionally, treasury will restructure the $ 40 billion in preferred equity aig issued to the treasury in connection with the actions taken to aid the company in november. this restructuring, along with the injections of capital from the new preferred shares, will bolster aig's capital position and reduce its leverage, bolstering confidence in the company