) that permits losses to flow smoothly to the topco. by transferring losses upwards, an ailing subsidiary is recapitalised. whether that suffices for the host authorities will depend on their confidence in the capacity and willingness of the group ’ s home authorities to execute an effective resolution of the topco. by contrast, for groups for which multiple - point - of - entry – breaking up a group – is the preferred resolution strategy, the host authorities of a subsidiary identified for “ separation ” must ensure that it has a capital structure and sufficient operational independence to enable them to resolve it themselves with their particular set of powers. put simply, for firms within a group for which spe is the preferred resolution strategy, the group as whole is a source of strength on which local supervisors can place weight. that is less true for groups for which mpe is the preferred resolution strategy. summing up, from a resolution perspective, the distribution of loss - absorbing capacity ( the sum of going - concern and gone - concern loss absorbency ) is crucial. yet, from a regulatory and supervisory perspective, there is as yet no international standard that requires a banking group to ensure a sensible distribution of equity ( and debt ) within the group. the international standards on banking will need to catch up. the calibration of capital requirements : stress testing but how much capital ( equity and gone - concern loss - absorbing capacity ) should a bank have, and how should regulators decide? i will conclude by saying something about how stress testing can help. the minimum standard set in the basel capital accord is just that : a minimum standard. there has to be provision for add - ons for individual banks ’ particular circumstances ; and also for temporary across - the - board increases when the environment has become more threatening than anything envisaged when the accord was calibrated, ie when the world has become extraordinarily risky. in the united kingdom, the financial policy committee ( fpc ) has the power to recommend, or direct, the micro - supervisors to vary capital requirements temporarily in order to protect against just such unusual threats to stability. but in order to use those degrees of freedom, policymakers need a good framework for assessing banks ’ capital adequacy in different circumstances, both at the level of the system a whole and for individual firms. the bank of england – financial policy committee and prudential regulation authority – believe that a regime of concurrent stress testing of banks is an important part of the

, sharing insights and feeding into consultations and dialogue. to meet the fsb targets there is also a practical role for the industry to respond to the building block actions and reports, with some requiring direct action. this might include : ( i ) investing in new technologies, ( ii ) preparing for changing operational procedures and ( iii ) adapting business models. the role of public authorities and there is a crucial role for the wider public authorities. central banks changing systems and policies and industry investing in changing operational procedures are just two pieces of the puzzle. there are also important regulatory, legislative and other barriers that overcome on a national and international level. for example, finance ministries will need to prepare legislative change to deliver the benefits of the roadmap ( e. g. on aml / cft standards, data frameworks and settlement finality protections ). and international standard setting bodies will need to ensure that these standards are aligned on a global level. the financial system is global, with many of the most important issues requiring the involvement of international public authorities. the fsb, cpmi, the bis innovation hubs, and a range of other standard setting bodies will have a continued important role to play to reach the quantitative targets for cost, speed, access and transparency of cross - border payments. they will need to enable best practice sharing between different jurisdictions, monitor the progress achieved on the roadmap and set out clearly what industry needs to do, and to explore what structures could achieve real change. the imf and world bank could also help by encouraging involvement and collaboration of non - cpmi countries and offering technical assistance. conclusion i want to leave you with three key messages today : enhancing cross - border payments is crucial to the global economy ; tangible progress is already being made ; and to really change the dial we need work collaboratively. and “ we ” means the three groups of stakeholders - central banks, industry and public authorities – working towards a common vision. the one difference to the trireme is that there may be different starting points reflecting the nature of individual jurisdictions. i look forward to continuing to work with you all on this important mission to enhance cross - border payments : collaboration will be the key to our success. i would like to thank paul bedford, michaela costello, sophie dalzell, john jackson, anna koch and karin oldham for their help in preparing these remarks. 1. cross - border payments outlook 2022 : trends, challenges, and opportunities 2. trading economics : remit