With this approach, firms have an obligation to share relevant and significant issues around the globe with key host country supervisors on a timely basis. As well, firms need to share more global data – including key risk management reports – that allow host supervisors to better understand important vulnerabilities, as well as the overall condition of the firm. While information sharing among supervisors can address some of this, it’s insufficient to assume that key host country jurisdictions don’t need to have a view of the overall health of the company. And, finally, clarity – or transparency – of communication with supervisors needs to be a focus going forward. There are times when firms attempt to respond to questions or concerns with very narrow answers or with an overwhelming amount of paper. This generally leads to additional follow up – on both sides – and a lot of time and energy expended to resolve the outstanding questions. I encourage you to ask for clarity when we aren’t being clear and to try to understand better what we are looking for by asking more questions. One way that you can facilitate better information flows is to provide us with what you provide to senior management and board members, rather than producing something just for us. •  Second, invest in MIS. One of the key weaknesses identified during the last crisis was that information systems within firms weren’t robust enough to provide timely and accurate risk management information as events unfolded.
Government bonds were swapped for covered bonds issued by banks and normal lending activity was restored. However, this was not the first time the Government had used swaps to stimulate the real economy. We did so around 200 years ago...  A swap of government bonds for privately issued securities was used already in 1819 when Norway emerged on the scene as a sovereign country after the Napoleonic wars. The 1819bonds were swapped for bills of exchange issued by farmers and merchants in the domestic market. With these bonds as collateral they managed to raise sufficient credit to import seed to secure important supplies to farmers and merchants in this difficult period in Norwegian economic history. This is a historical example of how financial markets underpin economic growth. BIS central bankers’ speeches  1  More generally, financial markets contribute to economic growth in three ways:   They create credit to make it available for real investment.   They allocate credit to the most profitable investment projects.   And they improve risk sharing in the economy. The caveat is that they create the credit volumes that they find privately optimal, and allocate it to the projects that are most profitable to them. Neither the credit volume nor the credit allocation is necessarily socially optimal: this is one basic reason why financial markets are and should be regulated. The next question is: How strictly should they be regulated? When does regulation severely impair the positive effect from financial markets to economic growth?