Adding in the related work of the international standard setters – the Basel Committee on Banking Supervision, the International Organization of Securities Commissions, the International Association of Insurance Supervisors, we are talking about literally hundreds of meetings over the past five years, attended by hundreds of experts across a wide range of fields. But only bureaucrats – and possibly international airlines and hotels – are interested in inputs like the number of international meetings… What about the outputs? The outputs have been impressive. Most so, is the international agreement on a new capital and liquidity framework for banks. The so called Basel III capital standard for banks was finalised in 2011. Banks have already begun the transition to the higher standards that will be fully in force by 2019. 2  BIS central bankers’ speeches  And the FSB has begun to take steps towards establishing a global capital standard for systemically important insurers. Alongside capital, the first ever international liquidity standard for banks was agreed at the beginning of this year. It is part of a new liquidity framework that will be finalised by the end of the year. We now also have an agreed definition for an international standard covering bank leverage – the so-called “leverage ratio” – the final standard is due to be set in 2017 after trial running. To critics, the speed of progress on liquidity and capital – key areas of weakness in the crisis – may seem painstakingly slow.
Philipp Hildebrand: The Swiss National Bank’s ability to act in the crisis Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Executive MBA HSG, Universität St Gallen, St Gallen, 21 January 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The global financial system is in the midst of the biggest crisis of the postwar years. Above all, the crisis is the most complex of this period. Problems in the US sub-prime mortgage market led to the breakdown of both markets and general trust. In particular, the interbank market, the nerve centre of the financial markets, froze up for several months. Governments and central banks managed to prevent the financial system from collapsing. The interbank market has been revived and risk premia have come down from their former record levels. In the meantime, however, the financial crisis has worked its way through into the real economy, which is now moving into a sharp downturn. In order to fight the crisis, the central banks have lowered their key interest rates aggressively. The instrument of the Swiss National Bank (SNB), the repo rate, has practically reached zero. However, this certainly does not mean that the SNB is incapable of action. If needed, there are other options available. The National Bank can extend the terms of repo transactions or give consideration to the purchase of government and corporate bonds.