. this does not mean, however, that all banks are ready and able to meet the standard today. even though the industry average is well above the minimum, our estimates suggest that roughly one - quarter of our sample could still have an lcr below 100 % even with the latest policy changes. so there remains a significant liquidity shortfall that will need to be addressed by a number of banks. one also has to bear in mind that favourable terms from central banks have helped to improve bank funding. central banks serve as lenders of last resort and, as economic conditions improve, banks will need to become more self - reliant. however, the timetable for the gradual introduction of the ratio ensures that the new liquidity standard will in no way hinder the ability of the global banking system to finance a recovery. it has taken a lot of time and effort to reach agreement on the lcr. it is, as i said, a deceptively simple idea, but its implications are big and far - reaching. unsurprisingly, there is much in the detail that required a lot of careful analysis and thought, not to mention a willingness to find a way through differing national perspectives. it is, however, critical that the new ideas such as the lcr ( and the other new features of basel iii such as the capital conservation buffer, countercyclical buffer, leverage ratio and nsfr ) are implemented if their benefits are to be realised. against that background, let me now turn to the work we have started to ensure that the basel iii framework is implemented as intended. bis central bankers ’ speeches …. to implementation steady progress is being made. as of january 2013, 11 out of 19 basel committee jurisdictions have final basel iii rules in place, including our hosts today, south africa. a number of non - member countries also implemented basel iii at the beginning of the year, further expanding its coverage. while it would be ideal to have much broader coverage at this time ( as at today, around one - third of global banking assets are officially subject to the basel iii requirements ), the delays should not be interpreted as any lack of commitment by global regulators to implement the agreed reforms. at recent international gatherings, all members have been asked to reaffirm their commitment to implementing the agreed reforms as soon as possible. and they have given that commitment ( subject, of course, to the vagaries of domestic rule - making processes that each must follow ). nevertheless, let

stefan ingves : from ideas to implementation remarks by mr stefan ingves, governor of the sveriges riksbank and chairman of the basel committee on banking supervision, at the 8th high level meeting organised by the basel committee on banking supervision and the financial stability institute and hosted by the south african reserve bank, cape town, 24 january 2013. as prepared for delivery. * * * introduction let me begin today by thanking josef tosovsky, chairman of the financial stability institute, for organising the latest in its series of high level meetings. the basel committee continues to view these events as extremely important, as they bring together senior policymakers and supervisors in a forum in which we can share thoughts on critical issues of the moment and reflect on long term challenges. let me also extend my thanks to the south african reserve bank for its superb hospitality as the annual host of this high level meeting. change and reform – new ideas and new ways of doing things – can be challenging in good times. when all is well, the perceived need is low and the costs – including opportunity costs – are difficult to justify. even small ideas can be difficult to implement. crises, on the other hand, provide a catalyst for fundamentally rethinking past practices. many banks have learnt this as a painful lesson in recent years : when times were good, potential operational, risk management and cultural deficiencies were not examined closely enough. when serious problems emerge, however, there is a demand for new ideas and new ways of doing things : the status quo becomes unacceptable. of course, the same scenario has applied to the regulatory framework more broadly. precrisis, any call for stronger capital and liquidity rules was generally howled down as burdensome and unnecessary. post - 2008, the costs of a weak regulatory framework have been all too obvious and painful for the banking sector, and as a result the demand for new ideas was immediate and forceful. my theme for today is that successful regulatory reform is about ideas and implementation. certainly, we needed to rethink the regulatory framework in light of what we have learnt from the past five years – the status quo was not acceptable. but if we want to be successful, the committee also needs to make sure that the ideas we developed into basel iii are truly put into practice. from ideas …. the basel committee ’ s response to the financial crisis was to recognise that policy weaknesses contributed to the excesses that built up in the financial sector. a substantial overhaul was necessary : minor adjustments