capital charges on the basis of the trading portfolio ; third, introducing of a leverage ratio for the financial institutions. fourth, improvement of risk management and disclosures, as the crisis has revealed the weaknesses of the so - called “ improved ” risk management techniques on the basis of the internal risk models. fifth, special attention should be paid to the so - called counter party credit risk from otc derivatives. it became evident that these markets bear risks both for the individual financial institutions ( microprudential ) and for the financial system ( macroprudential ). namely, otc derivatives are traded bilaterally between banks, other financial institutions and corporations. they are not traded through the stock exchange, making difficulties in discovering where the last risk is located, i. e. who bears the last risk. another set of tools should find a solution for the systemically important financial institutions, extremely complex question, extremely important for the systemic stability of the financial sector. except for the general agreement about the need of adequate harmonization of the prudential regulation, as the systemically important financial institutions are almost all “ crossborder ” by their nature, so far no higher consensus on solutions regarding this matter has been reached. in the current discussion, basically there are two distinctive approaches, starting from three key features of the systemically important financial institutions ( sifis ) : their size, complexity and inter - linkedness. according to one of the approaches, no institution is too big, complicated or linked to fail. in this sense, there are proposals to limit the size of the banks and to separate commercial from investment banking, disintegrate conglomerates by living wills, etc. some argue that “ this reasoning is controversial as the effectiveness of these measures depends on the specific features of a relatively small number of sifis ; different countries will probably come up with different solutions ”. ( carosio ) although it is possible, he says, to reach an agreement on some of these proposals, in particular on resolution mechanisms, others ( e. g. breaking up institutions according to some criterion ) would require a broad international political consensus, which seems unlikely at this stage. the second approach would be directed toward seeking additional capital requirement, or a tax, according to the measure for systemic relevance. taxation seems, according to carosio, more adequate in a burden - sharing perspective. “ the solution, in my judgment ”, says greenspan “ that has at least a reasonable chance of reversing

anita angelovska bezhoska : how to make capitalism work for all speech by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, at the imf / wb constituency meeting, skopje, 22 june 2019. * * * distinguished prime minister, ministers of finance and other respective representatives of government institutions, governors of central banks and other respective representatives of central banks, executive directors, vice presidents in world bank group directors in international monetary fund, professor zingales, delegates of the constituency, excellences, fellow colleagues, representatives of the media, at the very beginning, let me say how honored we are to have the opportunity to host this important gathering of our constituency. sixteen years have passed since the last meeting of the constituency in skopje, and we are delighted to have all of you with us here during these three days. by a twist of fate, i recently came across a book that i have not seen since my early youth days ; a book that starts with a very powerful notion – “ happy families are all alike ; every unhappy family is unhappy in its own way ” – you might recall tolstoy ’ s “ anna karenina ”. few days after, while searching for the most recent discussions on the matter of capitalism, inequality, wealth distribution, i read an analytical piece where the author cited the same quote, linking it with all the different modalities of inequality, as a symbol of the global unhappiness. standard metrics on inequality point to a widespread and rising phenomenon. it obviously underpins the rising populism, that reflects the dissatisfaction with the system that does not create equal opportunities for everyone, a system where reward is not merit based, i. e., system that gradually evolves into a crony capitalism. against this background, i have no doubts that we have chosen the perfect spotlight for this constituency meeting. let me shortly use the historical lenses – what questioned the sustainability of capitalism and led to marxism was the stagnation of wages and concentration of wealth in the early phases of industrial revolution. it gave ground for rising inequality, and as thomas pikketty, the so - called “ modern marx ” reveals in his book “ capital in the twenty - first century ”, the only exception from this rising trend of global inequality is the period as of 1914 until 1970s, as a historical outlier. indeed, actual data does indicate rising income inequality since the 1980s onwards almost across the board