At the level of the essential regulatory policies to buttress financial stability, let me recall: –  that with Basel III, we have a fundamentally revised global bank capital framework which will establish stronger protection through improved risk coverage, more and  BIS Review 131/2010  1  higher quality capital, a counter-cyclical buffer and a constraint on the build-up of banking sector leverage; –  Second, as part of Basel III, we will for the first time have a global liquidity standard for banks that will promote higher liquidity buffers and constrain the maturity mismatching that created the condition for this crisis;  –  Third, as I will describe later, we are making progress in developing a policy framework and tools to roll back the moral hazard risks posed by institutions that are TBTF;  –  Fourth, we have eliminated the perverse incentives that pervaded securitization, including the scope for leverage to develop in opaque off-balance sheet vehicles through changes to accounting standards and regulatory and prudential rules;  –  Fifth, we are establishing central clearing of standardised contracts in the OTC derivatives markets and a OTC global trade repository is now in operation;  –  Fifth, we have developed a series of supervisory tools to raise standards of governance, risk management and capital conservation at financial institutions.
But many of the features that are essential to the effective functioning of a central bank are equally necessary for an effective competition authority. 3. Pre-requisites for effective functioning  Two of these shared features are technical competence and independence.