Strengthening banks’ capacity to absorb shocks has been a major concern of policy makers, regulators and supervisors. On the regulatory side, the changes have been far-reaching. Policy makers and the public are well aware of the international drive to improve banking prudential standards and to overcome the regulatory failures that had become glaring with the financial crisis. The effort is ongoing.
Capital rules have been strengthened. Liquidity rules, a serious blind spot of the previous international system of standards, will be introduced. Systemically important banks, whose failure may trigger widespread disruption, will be subject to stricter standards. On the supervisory side, these have been times of severe testing. The action to reinforce capital and liquidity standards was and is central.