I want to focus on three specific challenges – (A) implementation of expected loss provisioning, (B) supervisory safeguards against money laundering and terrorism financing, and (C) financial innovation and cyber security. [A. Expected loss provisioning]  One such challenge is the implementation of the expected loss provisioning rules, IFRS9. Continued involvement of the Basel Committee in its implementation is paramount.
There is a clear risk that our common efforts to simplify a globally comparable prudential framework can be made somewhat more challenging by an accounting standard that is based on complex internal models. These are exactly the same models which we have opted to backstop amid concerns of arbitrage and perverse incentives. We fully support the concept of forward-looking expected loss provisioning.