. see fsb progress report, “ increasing the intensity and effectiveness of sifi supervision, ” released on 1 november 2012. bis central bankers ’ speeches moreover, improving risk disclosure, risk governance and risk management will further build a more resilient financial system. that is why i welcome the recently published report of the enhanced disclosure task force. this private sector effort, encouraged by the fsb, offers recommendations to provide investors with better disclosure about bank business models, key risks and risk - measurement practices. this should contribute, over time, to improved market confidence in financial institutions and financial market functioning, complementing regulatory developments by the public sector. i strongly encourage banks to implement these recommendations. as the basel capital rules are implemented, as market infrastructure changes, and as banks – and, crucially, their investors – develop a better appreciation of their prospects for risk and return, banks are beginning to change their business models. already, a couple of banks have fallen off the list of g - sibs because they have simplified, downsized and de - risked their business models. other institutions are de - emphasizing high - profile but risky capital markets businesses that benefited employees more than shareholders and society. as the reform process progresses, we can expect further adjustments that should ultimately lead to a more resilient, diversified sector with a more sustainable risk - return profile. conclusion last month in tokyo, the international monetary fund rightly asked whether the financial system is safer today than on the eve of the crisis. 11 the answer is yes. despite the challenging economic environment, banks have substantially increased capital and liquidity. they are more actively managing risks. countries are diligently implementing measures so that they can resolve failing institutions. the infrastructure of derivatives markets is being transformed to reduce systemic risks. the size of the shadow banking sector has fallen by 20 percentage points of gdp, back to levels last seen in 2004 – 05. however, while progress has been made, the global financial system is still not as safe as it needs to be. while much has been accomplished, much more needs to be done. the ambitious reform agenda i have described today will make a huge difference when fully implemented. all g - 20 nations need to raise their game. that is why the fsb is increasingly focused on timely and consistent implementation of agreed reforms. we will identify those who drag their feet or bend the rules and hold them to account. the case for reform remains as clear today as it did when the g - 20 began the process in

mark carney : some current issues in financial reform remarks by mr mark carney, governor of the bank of canada and chairman of the financial stability board, to the canadian club of montreal, montreal, quebec, 8 november 2012. * * * introduction i am pleased to be in montreal today, having just returned from meetings of g - 20 finance ministers and central bank governors in mexico city. while we covered many important topics, a substantial part of the agenda focused on assessing the progress of global financial sector reform. this is my topic today – providing you with an update of what has been achieved, and what remains to be done. the importance of these efforts should be obvious. five years ago, the complete loss of confidence in private finance could only be arrested by comprehensive backstops from the world ’ s richest economies. in the ensuing recession, the global economy lost more than $ 4 trillion in output and almost 28 million jobs. here in canada, we learned that keeping our own house in order is not enough. even with our strong and well - functioning financial system, the canadian economy suffered a decline of almost $ 70 billion in gdp and lost more than 430, 000 jobs. while we have more than recouped all those losses, our economy continues to be held back by the weak global recovery. that is why it is important for all canadians that all countries follow through on these reforms. to address the question of how g - 20 countries are doing, i will concentrate on three issues : • are banks safer today? • have we ended the phenomenon of institutions that are “ too big to fail ”? • is shadow banking a force for good or ill? let me turn to the first. are banks safer? banking system frailties were cruelly exposed by the crisis. many people remember the pivotal moment when lehman brothers collapsed, but that was only one example of a widespread failure of banking models across the advanced economies. in 2008, major banks in the united states, the united kingdom, germany, france, ireland, switzerland, the netherlands and belgium either failed or were rescued by the state. gallingly, on the eve of their collapse, every bank boasted of capital levels well in excess of the standards of the time. how was this possible? in some cases, “ off - balance - sheet ” exposures proved to be very much the responsibility of the banks when push came to shove. in others, balance sheets were stuffed with supposedly risk - free structured products that turned out to be lethally