A solid rulebook lays the foundations for banking supervisors to do their job. Since the financial crisis, the rulebook for banks has been thoroughly revised. Today, banks face much tougher rules than before. They need to hold higher capital buffers that consist of better capital. At the same time, they need to hold liquidity buffers – for the first time ever.
And these are just two of the things that help to make banks more resilient. So the regulatory base has been made more solid. But it needs to be more than solid; it also needs to be level. The rules for banks should, in general, be harmonised across countries. Only then would banks be able to compete on a level playing field.