to achieving the goal of market control and supervisory and adminstrative board control in the case of smaller regional institutions. in addition, we need to make sure that the disclosure reforms which were debated by the basel committee and are now being discussed in the eu bodies do not introduce any intrayear disclosure duties. the third area is probably the most far - reaching of all. what i have in mind is the creation of separate regulatory regimes for smaller institutions on the one hand and large multinational banks on the other. this two - tiered proposal has met with a rather muted response so far, and i don ’ t think it has much hope of being adopted at the political level. but i nonetheless think it is worth considering as a fundamental approach – one that would systematically address the excess burden placed on smaller institutions ’ operational capacities. a two - tiered system could be put into practice by grading the basel standards for institutions that are neither multinationals nor large in size. a broadly similar set - up has been up and running in the united states ever since the basel ii regime was implemented. any institution that exceeds a balance sheet threshold is subject to the basel rules. however, it would only be possible to do the same here in germany by creating rules at the european level. in that scenario, only banking multinationals would be subject to the fully loaded basel iii requirements in the eu. that would be appropriate from a risk perspective : global banking institutions would be regulated according to a harmonised set of global rules, while smaller institutions and those operating within a certain region would be governed by graduated rules which do justice to their different business models and risk profiles by setting less complex requirements. now there are some who claim that transitioning to that kind of system is a flight of fancy. what these doubting thomases mainly ask is where exactly the line should be drawn. i ’ ll be the first to admit that this is a challenge, but it ’ s anything but impossible. one way of tackling this problem would be to use a smart combination of selection criteria – for instance, combining a balance sheet threshold below which institutions would be subject to the simpler regime with a prudential decision based on the institutions ’ risk profiles. but there are still many crucial details and potential pitfalls that need to be addressed before we can even begin devoting serious thought to an option of this kind. this is something i think bis central bankers ’ speeches we should consider with an open mind. a systematic approach, assuming it ’ s

with foreign institutions or instruments can take comfort that those institutions and products are regulated based on similar high standards. efficiency & cost savings and the fourth reason is that the establishment of a set of standards that is subscribed to internationally has the effect of aligning the regulatory practices in different jurisdictions. this allows international financial institutions operating in different markets with similar features and rules drawn up according to international standards, to benefit from lower compliance costs. given a choice, from the business proposition point of view, few fund managers, issuers or financial advisers would wish to expend resources on compliance systems to keep track of different requirements and procedures in different markets. much work is already underway to develop international standards on specific subjects. within iosco, mas is a participant of various of its working groups including the internet project team and the implementation committee which, as its name suggests, has been tasked to implement the 30 iosco principles of securities regulation. apart from iosco, a number of other fora has also proposed recommendations in their respective areas. these include the basle committee ’ s work on a set of globally accepted principles of risk - based capital among banks ; the group of 30 ’ s work in the area of standardising otc documentation ; and a collaborative effort by the bank for international settlements and iosco on recommended standards for securities settlement systems. indirectly giving impetus to international best practices is the imf and world bank ’ s financial sector assessment programme ( “ fsap ” ). under this initiative, assessors will collaborate with regulators in participating jurisdictions to benchmark financial systems and practices against global standards. mas is convinced that these efforts represent considerable value - add to the global regulatory environment and has participated in support of these initiatives. we will be undertaking an fsap this year. as an international financial center, we are also committed to contributing to international financial stability as a member of the financial stability forum, and have found our involvement in various of its working groups to be invaluable. the establishment of international standards and best practices as the way forward will become even more compelling as globalisation continues, and regulators should be prepared to stay engaged with the process. in doing so, it should be recognised that initiatives to draw up international standards in themselves also add value by prompting regulators to re - examine existing regulation and review the policy rationale behind them. this is useful in bringing dated practices back into line with international best practices. improvements to comply with globally accepted principles will benefit the market ’ s growth