The key elements of the reform were the following: (i) more capital, including through additional buffers, graduated according to the systemic importance of the bank, and also targeted at macroprudential risks; (ii) capital of a better quality, i.e., made up of instruments that would effectively be able to absorb unexpected losses without triggering a default; (iii) new requirements for risks that had previously been ignored, such as the Credit Valuation Adjustment for derivative transactions; (iv) liquidity requirements; and (v) limits on leverage.
The task is significant but, as has been said, ‘The best time to plant a tree is 20 years ago. The second best time is now’. Conclusion I’ll return to Tāne Māhuta and his efforts to let the sunshine in so life could flourish. Disclosure is a tool to let in the sunshine. Better information to make better decisions.