Basel III: stronger banks and a more resilient financial system
It is has now been three and a half years since the global financial crisis began. The banking sector and financial system have now been stabilised. But this required unprecedented public sector interventions. Despite the severity of the crisis, we are already seeing signs that its lessons are beginning to fade. At the same time, there are still significant risks on the horizons, while key reforms still need to be carried through if we are to achieve a truly stable banking and financial system.
I would like to begin this morning by recalling the damaging effects of the crisis and why the Basel III reforms are central to promoting financial stability. I will then briefly outline the key reforms that comprise Basel III. Finally, I will focus on what still needs to be done to ensure longer-term stability. In particular, I will discuss the need for global and consistent implementation of the Basel III reform package and the ongoing work to address the risks of systemic banking institutions.