For now though, I will say that we believe that there are few efficiency gains to be made by going beyond the current proposal of 18% (or 17%). The level of capital we think is needed to meet our soundness objective has also addressed the potential to increase stability without adversely impacting on long-term output.
There were other threads of analysis that supported our proposals. A comprehensive review of the international literature told us that we were within the range of capital ratios that were appropriate. Furthermore, building on analysis that began in 2012, we looked at the implications of representing society’s risk appetite differently.