caused severe losses in the u. s. and europe. despite this, they were not immune to the ripple effects of the global spike in risk aversion. our approach to regulation is to allow the financial sector to grow, innovate, and support the needs of the economy, without compromising the safety and soundness of the financial system as a whole. with this context, let me now turn to the reforms. international monetary fund, executive board assessment, 23 july 2010. bis central bankers ’ speeches the emerging global regulatory paradigm following wide - ranging discussions and consultation, the global regulatory community has made progress to strengthen the resilience of the financial system. the basel committee on banking supervision has strengthened global minimum capital standards as part of its basel iii framework. the financial stability board ( “ fsb ” ) has released guidelines to reduce the risks posed by systemically - important financial institutions, or “ sifis ”. mas welcomes the basel iii reforms. they will strengthen the resilience of individual banks during periods of stress, and in doing so, contribute to banking sector stability. basel iii is a major step forward in several areas : ( i ) first, it strengthens capital requirements for trading activities, off - balance sheet vehicles, securitisation, and counterparty credit derivatives. ( ii ) second, it improves the quality of capital, with a greater focus on common equity to absorb losses. ( iii ) third, it raises the level of capital that banks will have to hold to absorb losses in both going - concern and unwinding scenarios. ( iv ) fourth, it introduces international liquidity standards for the first time, to make banks more resilient to short - term funding disruptions and longer - term liquidity mismatches. the fsb is finalising its recommendations for global systemically important financial institutions, or g - sifis. this will comprise a package of measures, the most important of which are quite clear : first, g - sifis will have to meet higher capital requirements, above the basel iii minimums. this is to reflect the greater risk that their failure would pose to the financial system. second, resolution frameworks have to be established, to ensure that all banks, however complex or large, can be resolved in an efficient and safe manner. such frameworks may involve the simplification of firm structures and the design of “ bailin ” mechanisms, where creditors are forced to absorb losses when a bank is

exchange rate policies, on which we exchange views. our two institutions also have to manage a growing pool of official foreign reserves in a global market that is increasingly uncertain. the opening of snb ’ s singapore branch is an important milestone in the strong friendship and good relations between singapore and switzerland, and between mas and snb. through this branch, our two institutions will come even closer together and i look forward to new areas of cooperation. bis central bankers ’ speeches we value highly our relationship with snb. working with snb over the last ten months to set up this branch has been a real delight for mas. you are clear in your objectives, methodical in your approach, and always gracious and understanding in your dealings. thomas, you will always have the full support of my colleagues and i at the mas, as snb grows its presence here. once again, please accept my congratulations on the opening of your branch. have an enjoyable evening ahead! bis central bankers ’ speeches