It also requires that market forces be allowed to determine the relative sizes and boundaries of the banking and shadow banking sectors; and that the market decides which firms prosper and which firms fail. The FSB has a clear role to oversee and coordinate the development of the G-20 reforms. It should provide a system-wide perspective and assess the total impact of reforms.
We are broadly supportive of Basel III, but will implement it in a manner that is appropriate for our financial system. We don’t believe our banking system requires the sort of radical overhaul that is being discussed as necessary in some other countries, given the relative resilience of our banks over the course of the crisis.