This issue is related to a topic I will return to; adequate disclosure of GLAC, and the ability of creditors to be able to  BIS central bankers’ speeches  5  assess accurately their position in the creditor hierarchy and the corresponding risk their exposures have. But first, I would like to point out that requiring eligible instruments to rank below excluded liabilities (such as derivatives), does not mean that G-SIBs will have to meet GLAC with traditional Tier 2 debt. There are various mechanisms available through which “senior” bonded debt could remain senior to traditional subordinated debt but junior to the general creditor class. For example, this could be achieved via contractual provisions; as resolution authorities are empowered to require for MREL in the BRRD. Another option is for G-SIBs to issue GLAC-eligible instruments from a holding company and downstream the proceeds (often referred to as “structural subordination”). Another option that has been suggested is either to prefer excluded liabilities or subordinate eligible liabilities in statute – although agreeing changes to national insolvency laws could prove challenging. Again, whatever the approach, adequate disclosure at the legal entity level will be crucial to allow creditors to identify easily their position in the creditor hierarchy. With such adequate disclosure, there is no a priori reason why the cost of meeting such a requirement would differ between the approaches.
And while no one I think clearly understands just why the euro has been as weak as it has particularly once the Eurozone economy began to pick up from about the middle of last year - the evidence is that it has not had as much to do with a change in relative monetary conditions as between the UK, and the US, on the one hand and the Eurozone on the other as is popularly supposed. It is in fact much more difficult to affect the exchange rate - directly through our domestic monetary policy than you might imagine. Of course we do take full account, in our forecasts and in our policy judgements, of the implications of the exchange rate, and of the international environment more generally, for our own economy. That was why we moved aggressively to cut interest rates a year or so ago. Sterling did not then fall against the euro as you might have expected - it actually rose. Even though we could not change the international environment, we were able to cushion its negative effect on the economy as a whole by providing an offsetting stimulus to the domestic economy. Had we not done so, we might well have suffered recession in the UK. BIS Review 18/2000  2  But the situation now is very different with the economy as a whole has strongly recovered and is now once again, operating close to capacity and apparently continuing to grow at above trend.