Hector Sants spoke on the challenges facing bank regulation. He raised several points discussed in previous speeches, including the proposed reforms to capital and liquidity and FSA's enhancements to the significant influence function review. On general supervisory issues, he said, in his view:
- central banks and regulators must work together to achieve the right macro-prudential approach to whole system risks; and
- it would be a big mistake to separate prudential and conduct supervision.