We also are developing benchmarks, tools and metrics that supervisors can use to promote more consistent liquidity standards for cross-border banks. Better risk management and supervision I have discussed the importance of having stronger global standards for capital and liquidity, but this is not enough.
If firms have poor governance and risk management cultures or if supervision is weak, then we could again find ourselves with the types of problems we are now facing. We propose to build on Basel II’s supervisory review process – Pillar 2 – to raise the bar for risk management and supervision practices.