However, this, in turn, raises some concern on how to justify “rare circumstance”. Again, implementation is a challenge, and no doubt you would have valuable discussions here. As for the efforts to mitigate procyclicality, various models have been proposed for the buildup of reserves and capital buffer. Each model has its pros and cons. On the capital side, there are proposals to increase capital charge for securitisation product and market risk, as well as harmonising the definition of capital. We agree that the banks’ capital buffers need to be improved both quantitatively and qualitatively. However, timing of implementation of guideline on definition of capital is quite crucial, and must be carefully considered. On the provisioning side, the current discussion is on which approach to be used as an alternative to the incurred loss model. The Bank of Thailand supports the principle of expected loss and dynamic provisioning, although it will be technically challenging to implement. As a regulator,  BIS Review 146/2009  5  we need to weight the balance on pros and cons of various models proposed as well as consider if it fits the national context. Turning now to the third dimension where a balanced approach is required. The balance in relationship and responsibility of home and host regulators, and a balanced voice of emerging markets on cross-border systemic risk. This is all the more important now, as regulatory reform across countries can create regulatory gaps and un-level playing-filed, that could cause instability down the road.
But it was evident too in the formation earlier last  BIS Review 8/2002  1  year of the Guild of International Bankers, our co-hosts this evening, and of which you, Lord Mayor locum tenens, are the Founding Master. It takes on the mantle - or, perhaps more appropriately, takes over the ledger - from the Bankers Club which has contributed so much to the City's professional esprit de corps over so many years. So it has, as I said, been a long, hard year, President, but it has certainly had its positive moments. And I should like to conclude by paying tribute this evening to the role of the City Corporation and of the Mayoralty, and their contribution to many of the positive developments we have seen - through their own example in promoting community involvement, including their support for the Heart of the City campaign; through their own role in maintaining security and co-ordinating the "public" infrastructure - both vital to all our contingency plans; and through their support for the fundamentally international character of the City, not least in opening the way to the Guild. I am profoundly grateful to them for all the help and support they give to us all. It is in that context that I ask you now to rise and join me in a toast to "the Rt Hon The Lord Mayor, the Corporation of the City of London and the Sheriffs." 2  BIS Review 8/2002