off from your description, ken, of having “ no money in the vault ” to back up their loans. 1 in response, international regulators have increased the minimum amount of capital banks must hold by about five times and are making the largest, most complex firms hold even more. in addition, we have added a safety belt imported from canada with a simple, but effective, leverage standard. this protects the system from risks we think are low but in fact are not. canadian auto workers ( cwa ) president ken lewenza speech to the caw council, p. 6, december 2, 2011. bis central bankers ’ speeches ending too - big - to - fail these measures have lowered the probability of failure, but since failures will still happen, their impact must be reduced, which is one of the reasons to focus on ending “ too - big - to - fail. ” we must address, once and for all, the unfairness of a system that privatises gains and socialises losses. by restoring capitalism to the capitalists, discipline in the system will increase and, with time, systemic risks will be reduced. in addition, the knowledge that major firms in markets far away can fail, without meaningful consequences at home, will restore confidence in an open global system and allow ken and all of us to focus on our day jobs. to ensure that bondholders, shareholders and management – rather than taxpayers – bear the brunt of losses, all fsb member countries have committed to have in place a bail - in authority and will have specific plans by the end of this year to recover or, if necessary, resolve these firms. the framework for systemic institutions is now being extended to domestic banks, global insurers, and key shadow banks, such as hedge funds. when implemented, greater supervisory intensity and higher loss absorbency will ensure that the financial system is never again beholden to the fate of a single firm or group of firms. creating continuously open markets an important element of ending too - big - to - fail is ensuring that key markets can withstand the failure of firms. creating continuously open core markets requires changes to the plumbing of derivative and repo markets, along with better data and tracking of exposures. moving from shadow banking to market - based finance finally, the fsb is working to strengthen the oversight and regulation of shadow banking so that it is a source of competition ( to promote efficiency ) and diversity ( to promote resilience ) to the regulated sector. this will require

for the greater part, these are matched by liabilities in the form of currency, bank deposits and government deposits. the excess of assets over liabilities is represented by capital and internal reserves. these totalled 2½ billion euro at end - 1999. this is the figure to which the term “ free reserves ” is applied. this is the capital which supports the bank. it is also a buffer against changes in the value of external reserves, arising from movements in the euro vis - a - vis other currencies. relative to the size of our balance sheet, this figure is at the lower end of the scale vis - a - vis other euro area national central banks. the national central banks in the eurosystem no longer conduct foreign exchange intervention. it is fair to ask, therefore, whether they now have surplus external assets. there is a recognition that this question should be addressed in due course. these reserves are subject to call by the european central bank. in all likelihood it will make a further call for additional capital and foreign reserves. it would seem preferable therefore that the issue of superfluous reserves be settled at the general european level rather than taking unilateral action. our external reserves are denominated, for the greater part in us dollars and to a much lesser extent in sterling and yen. there is also a small quantity of gold. the reserves are invested in deposits and securities and are managed by reference to an independent benchmark. the central bank has a very good record in managing large - scale funds. in respect of 1998 we earned a surplus of 225 million euro ( ir£177 million ), mainly from investment of reserves and interest. of this, 193 million euro was transferred to the exchequer. banknotes and coin to most people the euro probably remains largely academic until it is available in their pockets. it is still considered a currency in transition. in less than two years from now the new banknotes and coin will have begun to replace national currencies. the impact will be huge at local level ; immediately the euro will become the concern of everybody. may i remind you that the largest banknote will be 500 euro ( roughly £400 ) and the smallest coin will be one cent ( which is 4 / 5 of a penny ). there will be seven banknotes and eight coins. our production arrangements are already well in hand. in recent years we have invested more than £30 million in new plant and machinery. coin production is under way since last