They had also put in place caps on so-called discretionary federal spending--that is, the portion of federal spending that is allocated annually--and had required that legislative changes to taxes or entitlement spending be deficit neutral, a requirement called the PAYGO rule.
Another principle underlying our methodology, namely the principle of proportionality, is linked to the qualitative part of our approach. We tailor the frequency, intensity and also the level of supervisory expectations vis-à-vis banks’ internal arrangements and processes to the nature, scale and complexity of their activities. Let me speak briefly about the results of this capital determination process and our expectations for the future.