Strengthening banks’ capital base is certainly the most important, but also the most difficult, task on the regulatory reform agenda. Being involved in the processes of the Basel Committee and the FSB, the Bundesbank appreciates the decision by the G20 to improve the quality and quantity of banks’ capital once the financial system has stabilised on a sustainable basis and the economy has recovered.
However, we should refrain from unsettling the markets with precise schedules. Getting it right is important. The impact study of the new capital measures of the Basel Committee on Banking Supervision, which is planned for 2010, should provide some enlightening information. As regards the introduction of a leverage ratio, we are afraid of competitive distortions, in particular owing to differences in accounting standards.