A number of potential sources need to be investigated, including capital requirements, valuation and leverage, banks’ compensation schemes and provisioning regimes. In this context, I welcome the work to be carried out under the auspices of the FSF. Second, markets have excessively rewarded short-term profits at the expense of lower longterm performance or plain losses.
The excessive focus on the short-term has resulted in a  BIS Review 154/2008  3  significant underestimation of low probability but high risks and in the increase of risk-taking behaviour. In this context, there is a need to create an incentive framework that adequately assesses and rewards performance over the medium to longer term.