For instance, operational risk was not part of our risk-management thinking ten years ago, but tools to identify, measure, and manage it are now becoming prevalent. Also, the lines between the banking book and the trading book have blurred significantly and organizations continue to move resources and products to optimize earnings and manage risks.
And finally, global competition has intensified significantly, as the ability of customers to choose from a variety of local and international banking firms, as well as nonbank competitors, has increased. While the current Basel I-based rules have served us well for nearly two decades, they are simply not appropriate for identifying and measuring the risks of our largest, most complex banking organizations.