This will help ensure that reserves and capital are built up during periods of earnings growth, so that they can be drawn down during periods of stress. The Committee is working to translate this important principle into a concrete proposal. The approach needs to have robust standards that can be applied at the global level and translated into national contexts.
Finally, the capital framework needs to be underpinned by a non-risk based supplementary measure. This is particularly important as the Basel I-based floors are phased out.