the stability of the financial system, it also encourages sustainable developments in the real economy. on the whole, i believe we have been neither overregulating nor underregulating. it is now crucial to apply the rules that have already been adopted consistently and to complete the outstanding reforms promptly and comprehensively. the rest of the reforms are in the pipeline. they will be rigorous, but not excessively so. that ’ s all there is to say. credit institutions will have to get used to a new market environment and develop business models that are sustainable in the long term. but we in the basel committee will make sure that, on average, the minimum capital requirements do not continue to rise above the level already reached. to do this, the committee will insist that the overall burden of the reforms is analysed in advance and limited if necessary. once the basel iii reforms have been finalised, it is also important to allow time for them to be implemented rather than immediately embarking on new reforms. and i believe that we should check whether the rules could be simplified for smaller institutions. i therefore wholeheartedly back the proposals to review the eu framework by the german finance minister, wolfgang schauble, and the british finance minister. credit institutions must be regulated. but regulation cannot succeed without credit institutions. without the tireless efforts of the banks and savings banks, the banking and financial system will not improve. they have already gone to extraordinary lengths over the last eight years, and that must be rewarded. however, we have not yet reached the end of this long and winding road. let ’ s continue to travel together in the future. i now look forward to discussing with you what the path ahead might look like. thank you very much for your attention. bis central bankers ’ speeches

, when viewed from that perspective. in my view, the existing, soon - to - be - completed set of rules will be with us for some time yet. supervisors concede that the one - off costs of adjusting to the new rules are steep, but i am in no doubt that the non - recurring transitional outlay is appropriate, given that financial stability is such a valuable public asset. and as for the ongoing costs of compliance, this is another area where we will reach a viable long - term situation once the dust has settled over the reforms. i firmly believe that germany ’ s credit institutions will be able to live comfortably with this situation following a period of transition. we will, of course, review the rules and their impact after some time, listening very attentively to take constructive criticism on board wherever possible. ladies and gentlemen, let ’ s sum up the issue of complexity. the rules have become much more detailed and multifaceted ; the alternative to this would have been much tighter capital requirements, say, which would have been imposed regardless of the underlying risk. a multi - layered regulatory approach, then, is a “ next - best solution ” ; and i am in no doubt that the banking community will be able to live comfortably with this situation after a period of transition. the often - cited negative implications of regulation – that it tightens the credit supply and drives up administrative costs at credit institutions – should be analysed objectively. viewed from a distance, it ’ s possible to identify the myths and drill down to a kernel of constructive criticism. this kernel is what we need to give serious thought to – but blanket criticism would be unwarranted here. one point of departure for simplifying matters might be a move towards greater proportionality in banking regulation, and by that, i mean the debate over whether it would make sense to introduce a more graduated set of rules for smaller, less risky institutions. but why should we graduate regulation? some claim that proportionality isn ’ t necessary. after all, isn ’ t complying with complex rules a costly and time - consuming exercise for institutions, whatever their size? but i would say that the costs of compliance weigh more heavily on smaller institutions, with their smaller workforces. they essentially face two challenges simultaneously. first, the complex rules place strict demands on their operating business ; second, smaller institutions have limited organisational capacities to cope with the legal, technical and operational requirements. intricate sets of rules can cause particular du