Where countries do not have this infrastructure in place, a more hands-on involvement by supervisors in banks’ activities may well be appropriate. Where this infrastructure is in place, as it is in New Zealand, we believe that a supervisory regime based largely on self-discipline and market discipline is a viable option.
I mentioned a little earlier that we have concerns about some of the international initiatives currently underway to address financial system instability. The major issue for us is that we see some of the initiatives as potentially undermining the incentives we have established for banks to behave prudently.