CDS quotes on sovereign debt instruments issued by CEE countries  percentage points  450  basis points  180  3.0  400  160  2.5  350  140  300  120  250  100  200  80  150  60  100  40  50  20  0  0  2.0 1.5 1.0 0.5  Source: Reuters  Poland  Romania  Hungary  Poland  Nov.17  Sep.17  Jul.17  Mar.17  Sep.17  Jul.17  May.17  Mar.17  Jan.17  Nov.16  Hungary Germany  May.17  Czech Republic Romania  Sep.16  Jul.16  May.16  Mar.16  Jan.16  -1.0  Jan.17  -0.5  Jan.13 May.13 Sep.13 Jan.14 May.14 Sep.14 Jan.15 May.15 Sep.15 Jan.16 May.16 Sep.16 Jan.17 May.17 Sep.17  0.0  Czech Republic  Source: Reuters, NBR calculations 15  Figure 22. Composition of the deficit on the balance on goods  Figure 21.
An issue touched on earlier in the day was reporting and accounting, and one of the things the industry has done is to come up with something called the Enhanced Disclosure 2  BIS central bankers’ speeches  Task Force. The Taskforce proposed a set of recommendations for banks to develop highquality, transparent disclosures that clearly communicate banks’ business models and the key risks that arise from them, so that people who supply capital to the banks can follow how they make money, how they think about managing risk, and make judgments on the basis of that. The important point was that this was industry-led, and co-chaired by a London-based bank. There was some input from the authorities, but the industry led the initiative, and it’s a model we may use in other areas of finance. I mentioned Total Loss Absorbing Capacity earlier – I won’t use the acronym! I’m aware the full name doesn’t necessarily make it any more intelligible, but this is basically another layer of capital, and the ability to absorb losses in the event that a firm fails. It is more cost effective – so the cost is not passed on to borrowers. And the technology behind this was developed by the private sector, with the authorities contributing to ensure it could work effectively and on a global basis. But it was the industry, once again, that came up with the solution.