I hope banks will come to appreciate, just as the New Zealanders at Headingley in 1958, the Yorkshire virtues of patience and sound defence when batting on a sticky wicket. I have said many times that successful monetary policy would appear rather boring. So let me extend an invitation to the banking industry to join me in promoting the idea that a little more boredom would be no bad thing. The long march back to boredom and stability starts tonight in Leeds. BIS Review 128/2008  5
This not only applies to the less regulated players in the financial system, such as hedge funds, but also to a certain extent to banks. For instance, the rating agency Moody’s came to the conclusion in a report 1 published last year that banks generally do not disclose their risks sufficiently. In our Financial Stability Report, we also point out that it would be beneficial if Swiss banks were to provide more data in this regard. By providing more comprehensive data, banks would be helping investors and authorities to better assess the risks banks take. Banks should, for example, publish more results from their stress tests. Similar to crash tests, stress tests examine how severely the bank would be affected by a major crisis. Secondly, it is difficult to assess how the traffic would react in poor weather conditions. Even though the braking distance is relatively short on a dry surface, this is by no means a guarantee that the car will react in the same way on a wet or even icy road. A number of instruments currently in use in the financial system have not yet had to prove their worth in extreme stress situations. It is therefore not clear whether the risks for these new and complex products have been adequately assessed. These products are typically not assessed in a central market, but by using complex models. In other words, the analysis is not a mark-to-market one, but a mark-to-model one.