My colleague Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England, recently described the overhaul of global regulatory standards in the wake of the financial crisis as a revolution,5 which I think hits the nail on the head. Through the Capital Requirements Directive implemented in 2013 and the associated Regulation, we are setting new capital and liquidity standards in Europe.
The most recent reforms, which implement major aspects of the Basel III framework already agreed upon, have made a major contribution to boosting the longterm stability of the European financial system. The banking lobby never tires of saying that additional regulatory requirements put considerable pressure on their institutions. I’d like to say two things here.