leaders in pittsburgh in september endorsed the fsb implementation standards that aim to defer bonus payments, disallow guaranteed bonuses, and introduce a claw - back clause. recent proposals on how to strengthen the prudential framework in addition, agreement has been reached globally on a comprehensive set of measures to strengthen the prudential framework in response to the crisis. in the eu, the commission ’ s proposal for an amendment of the capital requirements directive of july 2009 includes the internationally agreed stricter requirements for trading book and re - securitisations. moreover, the recently issued proposals of the basel committee aim at improving the quality, consistency and transparency of capital for credit institutions as well as developing a framework for liquidity risk. as a consequence, the quality of capital, especially the so called tier - 1 capital which is of utmost importance for loss - absorption on going concern and crisis situations, will significantly improve. • the risk coverage of capital requirements will be further strengthened for the counterparty risk related to derivatives, repos and securities financing activities, and incentives will be increased to move otc derivative exposures to central counterparties and exchanges. • a leverage ratio will be introduced as a supplementary measure to the basel ii risk control framework to curb excessive balance sheet growth and to safeguard against model risk and measurement error. • capital buffers and forward - looking provisioning will be introduced to mitigate the inherent procyclical nature of financial activities. • finally, a global minimum liquidity risk standard for internationally active banks will be put in place, requiring banks to hold sufficient high - quality liquid assets to withstand financial stress. these proposed measures have the support of the group of central bank governors and heads of supervision, who requested the committee to deliver a fully calibrated and finalised package of reforms by the end of 2010. the commission envisages the timely incorporation of the aforementioned upcoming regulatory changes in the eu framework. recent developments in european prudential framework finally, international cooperation has been strongly reinforced and supervisory colleges for large complex financial groups have been established. at eu level, the setting up and functioning of colleges is provided for in the eu regulatory framework and is well advanced. looking ahead, legislative proposals should fully reflect the ongoing work at international and eu level aiming at enhancing the resilience of the financial system and protect consumers and investors against the impact of excessive risk taking and irresponsible market practices. main priorities include : ( 1 ) finalising the reform of the prudential framework ;

philip r lane : international policy trilemmas remarks by mr philip r lane, governor of the central bank of ireland, to the london irish business society, london, 31 january 2017. * * * “ international policy trilemmas ” the implications of global and regional integration for policymaking have been much studied in recent decades. indeed, i spent 2002 – 2008 as director of the institute for international integration studies ( iiis ), which aimed to provide multi - disciplinary perspectives on the myriad policy challenges associated with cross - border integration1. in relation to economic policy, three so - called trilemmas capture the tensions in determining policy choices in an integrated world economy. first, the mundell - fleming trilemma postulates that only two of the following three choices are simultaneously feasible : an independent monetary policy ; a stable exchange rate ; and unrestricted international capital mobility2. among the advanced economies that largely adhere to the principle of unrestricted capital mobility, we see countries with independent monetary policies and floating exchange rates and we see countries opting for a shared monetary policy through the elimination of national currencies in the form of the european monetary union. for some major emerging economies, restrictions on international capital mobility are imposed in order to target both a stable exchange rate and some independence in domestic monetary policy. second, as proposed by dirk schoenmaker, the financial trilemma has it that only two of the following three options are possible : financial stability ; independent national financial policies ; and cross - border financial integration3. a restrictive approach to cross - border financial trade can enable a country to combine the maintenance of financial stability with purely domestic financial sector policies, while liberalisation in financial services trade typically requires considerable cross - border policy collaboration if financial stability is to be achieved, especially during periods of financial turmoil. third, as developed by dani rodrik, the political economy trilemma lays out the restrictive choices between : deep economic integration ; democratic politics ; and national policy autonomy4. at a strategic level, the institutional development of the european union has been directed at providing sufficient democratic foundations to underpin enhanced integration across various policy dimensions, through treaty reforms, inter - governmental mechanisms such as the european council and an enhanced role for the directly - elected european parliament. however, the brexit decision now compels europe to also develop mechanisms to foster collaboration between two entities ( the eu and the uk ) that will no longer be bound together by a common multi - layered institutional framework. while the