Moreover, we cannot set long term capital requirements on the basis of market reactions in the midst of the most severe deleveraging process we have seen in our lifetime.
This effort needs to be carried out as part of a considered process that balances the objective of maintaining a vibrant, competitive banking sector in good times against the need to enhance the sector’s resilience in future periods of financial and economic stress. Risk capture Let me begin with the issue of the risk capture of the Basel II framework.