•  The Basel Committee expects that we will achieve our goal of not raising in aggregate the capitalization required of the banking industry, though clearly and appropriately those banks that engage in higher risk businesses may see their requirements rise, and vice versa. G  2  To help ensure this, the Committee launched its third Quantitative Impact Study on October 1, 2002, involving, to date, 265 banks from nearly 50 countries. The banks will assess how the proposals will affect them and submit their findings by December 20, 2002. These results will allow us to ascertain the need for adjustments prior to the release of an updated proposal for public comment in the  BIS Review 61/2002  second quarter of 2003, followed by finalization of the New Accord in the fourth quarter of 2003, and implementation at year-end 2006. •  While much work clearly remains to be done over the next three years - including evaluating banks' readiness, training supervisory staff, and working towards consistent implementation across supervisors - in my view, both the journey and the ultimate destination of a New Accord will contribute substantially to a more resilient international financial system. •  Unfortunately, while there is a deepening consensus on key elements about how to promote resilience ex ante, there is no comparable degree of consensus on how best to handle international financial crises once they do erupt, or the proper roles of public institutions and the private sector in containing and resolving such crises.
§  6  Increases and decreases in financial flows - - and the fluctuations in pricing that naturally accompany positive or negative trends in policies and economic and financial performance - - are a reflection of, and act as a natural brake on, the development of imbalances. BIS Review 61/2002  §  G  But an assertion of control by the international community risks diverting attention from the policies of the local authorities. As a result, denial and delay, aggravating factors in almost every crisis, may well continue and be exacerbated. And then, as a practical matter, once market processes have been stopped, how and when do you get things started again, particularly if needed corrective policies still have not been convincingly and transparently implemented? To sum up, I believe the one-size-fits-all disposition inherent in a preemptive approach risks making situations much worse than they need to be. The only thing that strikes me as predictable under such an approach would be that market access would be harmed across the board. Just as bailouts risk encouraging too much risk taking, efforts to orchestrate preemptive bail-ins may encourage too little. •  Underlying the suggestions that I have made is a firm belief that the success of our approaches to crisis management needs to be viewed and assessed with a wide focus. Certainly, there is the question of efficacy in containing the crisis at hand, and the balance between this and the costs, actual and potential, to the public sector.