In exercising these powers, authorities should be transparent, adopt relevant standards and principles and apply them consistently. It is also crucial for central banks, market regulators and other authorities to cooperate in undertaking these tasks.
The need for increased cooperation also stems from the fact that the crisis has made us appreciate more the interconnectedness (domestically and internationally) of the various parts of the financial system we operate in, and how, in the absence of cooperation and coordination, regulatory arbitrage (on the back of financial innovation) can lead to a rapid build-up of systemic risks.