The introduction of the two liquidity ratios will make banks more resilient against sudden liquidity and funding shocks. These reforms were changes necessary to the regulatory framework but are, in my view, not yet sufficient for a stable financial system.
In view of the current rhetoric of reform fatigue, it is important stress that we still need to finalise several important initiatives that are currently under way. They are all needed in order to effectively correct market failures and with the minimum of cost to the real economy.