. see senior supervisors group ( 2008 ), observations on risk management practices during the recent market turbulence ( basel : ssg, march 6 ), available at federal reserve bank of new york ( 2008 ), " senior supervisors group issues report on risk management practices, " press release, march 6. one critical area for improvement is that of increasing capital requirements for many forms of traded securities, including some securitized assets. some work has already been completed. we place a high priority on undertaking a comprehensive review and reform of these requirements. the basel committee is also working on proposals for an international leverage ratio to act as a supplement to risk - based capital ratios. the fsb has also devoted considerable energies to exploring sources of procyclicality in the financial system, which are those practices and structures that tend to amplify rather than dampen the cycles characteristic of financial markets, and to identifying possible strategies to reduce their effects, which were often quite visible during the recent crisis. one such strategy is to include a countercyclical capital buffer in the capital requirements for financial firms. work on such a buffer is under way, though the technical challenges of devising an effective buffering mechanism are significant. it will be important for the international regulatory community to carefully calibrate the aggregate effect of these initiatives to ensure that they protect against future crises while not raising capital requirements to such a degree that the availability of credit to support economic growth is unduly constrained. the basel committee plans a study of the overall calibration of these changes for early next year. liquidity liquidity risk is another key international agenda item. although the basel committee had historically focused on capital standards, the crisis clearly demonstrated that adequate capital was a necessary but not always sufficient condition to ensure the ability of a financial institution to withstand market stress. we were reminded that the liquidity of a firm's assets is critical to its ability to meet its obligations in times of market dislocation. in particular, access to wholesale financing very quickly became severely constrained for many institutions that had grown quite dependent on it. the basel committee promulgated general guidance on liquidity risk management in june 2008 and is now in the process of incorporating those broad principles into specific quantitative requirements. cross - border bank resolution in the area of cross - border resolution authority, there is broad international agreement that existing frameworks simply do not allow for the orderly resolution of cross - border failures of large complex banking organizations and that changes are needed. current framework

##finance sector and promote financial literacy. the fund has been established at the state bank with help of an endowment of usd 20 million under the adb - supported “ improving access to financial services program – iafsp ”. the fund will provide benefits for and have positive impacts on rural and urban communities, in particular the poor & the women. 13. these benefits are quantitative and qualitative in nature and include ( i ) capacity building and training of financial services providers to promote expansion into rural areas ; product and service innovation, including savings, remittances and islamic financial services ; adoption and integration of new technologies and applications for improving access to financial services ; ( ii ) capacity building and training of government and regulatory authorities to support development of an inclusive financial sector and implementation of measures under the program ; and ( iii ) literacy programs ( financial and basic ) conducted by or on behalf of financial services providers for clients and potential clients to improve access to financial services and the utilization of finance. 14. to initiate provision of grants sbp has developed detailed guidelines, selection criteria and application format for the iafsf. the fund will initially focus on regulated institutions to ensure transparency and good governance practices to attract investment in the microfinance industry. grants shall be provided to projects that meet the criteria for improving basic & financial literacy of current and potential microfinance consumers besides promoting utilization of cost effective means for financial service delivery and expanding outreach to rural and remote areas. 15. in conclusion, i would like to highlight that all the sbp initiatives have strong support of the industry simply because of the partnership we have with the pakistan micro finance industry and network. ultimate success of these initiatives lies with both the banking and microfinance industry and we count on their continued dedication for promotion of microfinance industry.