##400 billion just a year previously. 2 these banks are internationally active and have tier 1 capital in excess of €3 billion. these shortfalls include, where relevant, any additional capital surcharge for those banks identified as systemically important on a global basis. as a point of reference, the sum of after - tax profits prior to distributions across the same sample of group 1 banks during 2012 was €420 billion. bis central bankers ’ speeches chart 1 : cet1 capital ratio ( % ), group 1 banks cet1 ratio h1 2011 h2 2011 h1 2012 h2 2012 basel iii fully phased - in chart 2 : cet1 shortfall ( € bn ), group 1 banks eur billion h1 2011 minimum h2 2011 h1 2012 h2 2012 minimum plus buffer plus g - sib surcharge consistency of bank capital regulation an important new mandate for the committee is to be more active in monitoring the implementation of the international minimum standards within individual member jurisdictions. this stems from the g20 leaders ’ desire that basel iii be implemented in a “ full, timely and consistent ” manner. consistent implementation is critical if there is to be a level playing field for international banks. implementation is more than issuing new rules and regulations. durable and consistent implementation also requires monitoring, evaluation and analysis of intended prudential outcomes. to this end, the committee last year instituted the regulatory consistency assessment programme ( rcap ). a key feature is the jurisdiction - specific peer assessment in which a small team of experienced supervisors and regulatory policy experts reviews a member country ’ s basel iii regulations across all its components and sub - elements. the purpose is to find any divergences from the agreed standards and to weigh the current and bis central bankers ’ speeches potential materiality of any weaknesses. to foster transparency, the resulting assessments are made public, together with an overall review of compliance with the basel standards. some comment that this effort, well intended as it is, will ultimately be fairly limited in its impact because the committee has no enforcement power and cannot override the sovereign regulatory power of national authorities. it is true that the committee does not have this power, and nor should it. but that does not mean that the peer reviews and the rcap process as a whole lack impact. we have thus far published five monitoring reports, and completed assessments on the final basel iii rules in japan, singapore, switzerland and china. in all cases, the implementation of basel iii was deemed compliant with the

/ speeches / default. aspx in this spirit, last year at mansion house, i announced that huw van steenis would lead a review of the future of the uk financial system, including recommendations for how the bank should respond. in two months, huw will publish his conclusions and the bank will announce a number of concrete steps to create an environment for a more resilient, effective and efficient financial system. to preview our general approach i want to highlight some recent measures the bank has been taking. the bank ’ s strategy is to enable innovation and empower competition, while ensuring monetary and financial stability. our levers are the hard and soft infrastructure we control : hard infrastructure, such as the real - time gross settlement ( rtgs ) system, which lies at the heart of the uk payment system. and soft infrastructure, such as our rules, regulations and standards. to illustrate what this means in practice, consider three examples of how the new bank can provide a platform for private innovation to serve the digital economy, to finance major transitions, and to increase the resilience of the financial system. serving the digital economy first, at the heart of the new economy, the very nature of commerce is changing. last year, one fifth of all sales in the uk were online. next year, it will be one quarter. the new economy is more inclusive, offering easier routes to market for firms both large and small, and greater access for consumers both near and far. we are entering an age when anyone can produce anything, anywhere and sell everywhere through platforms such as tmall, amazon, shopify and youtube. this new digital economy is placing new demands on finance. consumers and businesses increasingly expect transactions to be settled in real time, checkout to become an historical anomaly, and payments across borders to be indistinguishable from those across the street. in parallel, big data is opening up new opportunities for more competitive, platform - based finance of smes. search and social media data are supplementing traditional metrics to unlock finance for smaller enterprises whose assets are increasingly intangible. this new finance demands a bank of england that is as open to new providers as it has been to traditional players. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx here ’ s one way we are changing our hard infrastructure in response. the bank is in the midst of an ambitious rebuild