Supervisory Capital Standards: Modernise or Redesign?

I am delighted to have the opportunity to speak tosuch an eminent group at this important conference oncapital regulation.“If you see a banker jump out of the window,jump after him: there is sure to be profit in it,” said theeighteenth-century French philosopher Voltaire. Lookingat the situation in Southeast Asia, I am not entirely convincedthat it would always be wise to follow Voltaire’sadvice. Even if all banks pursue the same course, theiractions are not necessarily appropriate.It is also becoming clear, however, that the Asiancrisis has given new urgency to the already importanttopics of risk and capital adequacy. In that respect, thisconference has come at a very opportune moment.[...]