It is the continuing focus of relating capital to risk measurement and modeling, including the wider scope of risk types that can be measured, that provides a common framework to relate economic, market, and minimum regulatory capital. Recent developments in regulatory capital In my remarks today, I am going to focus on minimum regulatory capital.
To align incentives and ensure appropriate accountability, nationally defined tax bases imply nationally defined supervisory institutions. However, the crisis has demonstrated that the implications of supervisory failures extend well beyond national boundaries. First, cross-border contagion has been magnified by externalities and spillovers arising from greater area-wide financial integration.