The point here is not to blame banks for engaging in regulatory capital arbitrage. The fact is that regulatory capital arbitrage is an outgrowth of the considerable resources that banks have devoted to better measuring, pricing and managing risk. And it is also a response to serious shortcomings in our international capital standards.
The solution is not to reign in banks, but to catch up to banks, specifically to reform our international capital standards in a way that takes advantage of some of the advances in credit risk measurement and management in the industry. I am not going to be more specific at this point.