The benefits substantially exceed the potential output costs for a range of higher capital and liquidity requirements. The balance of evidence suggests that there is substantial room to strengthen capital and liquidity standards in a way that does not jeopardise near term growth, but enhances long term stability and economic output.
Moreover, we need to understand that we continue to live in an economic environment with downside risks. In such circumstances, we cannot afford to continue to operate with such thin minimum regulatory capital and liquidity requirements. The system does not have the capacity for another round of bail outs, nor does the public have the tolerance for it. BIS Review 112/2010  5