As my colleague Andrew Bailey from the Bank of England has rightly criticised, the call for ever-higher capital provisions neglects that there are other ways to successfully protect financial stability.I refer to the rules that are designed to make banks resolvable without systemic disruption. Such reconstruction is sometimes so delicate that we might think of it as open heart surgery on the patient bank.
It comes as well from ongoing interactions with central banks and financial institutions abroad. These international contacts are critical because today crises can spread more rapidly than in earlier times -- in large part reflecting new technologies -- and require a coordinated international response.