Public debt sustainability assessment Empirical model  𝑦𝑖,𝑡 = 𝑝𝑢𝑏𝑙𝑖𝑐_𝑑𝑒𝑏𝑡𝑖,𝑡−4 + 𝑢𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡𝑖,𝑡−4 + 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛𝑖,𝑡−4 + 𝑏𝑢𝑑𝑔𝑒𝑡 𝑏𝑎𝑙𝑎𝑛𝑐𝑒𝑖,𝑡−4 + 𝑟_𝑑𝑜𝑏𝑖,𝑡−4 + ℎ𝑖𝑐𝑝𝑖,𝑡−4 Structural Model  𝑗 𝐷𝑡−1 𝑠𝑡 = 𝜏𝑡 − 𝑔𝑡 + σ∞ 𝑗=1 𝛽 𝐸𝑡  𝑢′ 𝑦𝑡+𝑗 −𝑔𝑡+𝑗  International comparison – the level of the signal threshold in the case of public debt (regression model)  𝑢′ 𝑦𝑡 −𝑔𝑡  𝜏𝑡+𝑗 − 𝑔𝑡+𝑗  Calibrating the optimum level of the public debt using the general equilibrium condition (structural model)  percent of GDP 100 90 80 70 60 50 40 30 20 10 0 LV  BG  Public debt level  Source: NBR  •  SI  RO  CZ  HU  Signal threshold (regression model)  Source: NBR  For Romania, public debt level > 43% of GDP would lead to risk of recession > 50%  Figure 13.
I learned first-hand the views of CPLG members on ways to build the Committee’s rapport with other supervisors. I also received valuable suggestions on the Committee’s projects. The Committee will continue to rely on the expertise of the CPLG to provide non-G10 reactions to many of its main initiatives. For example, the Accord Implementation Group, which is chaired by Nick Le Pan, the Vice Chairman of the Committee and Superintendent of Financial Institutions in Canada, holds regular meetings with the CPLG to bring attention to non-G10 issues in implementing Basel II. Beyond this standing group, the Committee seeks other avenues for formal and informal discussions with other supervisors. The CPLG itself has recently suggested that regional groups of banking supervisors strengthen their activities so that they may serve as another channel for greater communication, cooperation, and commitment to shared objectives. The Basel Committee has long supported the development and mission of these regional groups. These groups foster regional cooperation as well as continued dialogue with the Basel Committee and other supervisors. More than a dozen of these regional groups exist, most of which met here yesterday. I encourage all of them to continue to develop programmes of their own. At a meeting between the Committee and the principals of the various regional groups, we discussed additional ways to strengthen future interactions between the Basel Committee and regional groups. One other formal effort that the Committee and its members support includes those events sponsored by the Financial Stability Institute of the Bank for International Settlements.