In the same vein, in order to contain household debt at prudent levels to prevent financial imbalances, a maximum credit-to-income ratio was imposed on credit card and personal loans. Let me now turn to the current financial crisis and discuss some lessons that are relevant to the issue of supervisory arrangement. If we look at the wide range of counties afflicted by the current turmoil, we immediately notice that financial sector problems happened in countries with either supervisory model. Notably, the US is well-known for its multiple agencies, whereas the UK has an integrated one. Yet both countries are currently faced with similar financial sector problems. One cannot help but think that there must be certain common supervisory weaknesses that led to the crisis, regardless of the supervisory arrangements. So perhaps the key question is not about the institutional form but rather about how to strength the regulatory framework to ensure financial stability. Of course, this is not an easy task, given the scale and the complexity of the problems that we are in right now. Several committees and working groups of various organizations, including the BIS, are working on a number of issues that have been identified as contributing to the crisis, such as the procyclical nature of supervisory and accounting rules and the inadequate focus on liquidity risk. I do not know whether there are efforts to try to identify common weaknesses of different institutional setup of supervision. But no doubt this is an area that more work will be needed.
I believe we need to have this new framework in place by 2010, as the current crisis is left behind, hopefully, and growth and stability are restored. As part of the work program already laid down in the G-20, critical points in the reform include the need to make regulatory capital more neutral over-the-cycle, by integrating the macro prudential framework into the required capital of individual institutions; the need to reach, with prudential regulation and supervision, all quarters of the financial industry; and the need to enhance transparency of financial instruments and markets. Thank you very much. 2  BIS Review 44/2009