Thomas Huertas of FSA spoke on curing the crisis. He spoke on the changes to capital and liquidity requirements and other key changes. He focused on:

  • the increase in the amount of capital required to back trading activities;
  • improving the quality of capital;
  • increasing the quantity of capital;
  • introducing a leverage ratio as a backward stop to the primary risk-weighted regime; and
  • improving the loss-absorption capacity of non-core capital.

He looked also at the new liquidity rules, which he said would force banks to:

  • measure the amount of liquidity risk that they are taking;
  • hold a buffer of truly liquid assets against that potential liquidity shortfall; and
  • assume a stable funding profile.

He also discussed measures on remuneration, supervision and macro-prudential regulatory priorities.