Thank you.
Thank you for your other comments.
Yes, most of what we've talked about this morning has been about the economic cycle, what the crisis did to us, and what the recovery's looked like so far and what we hope it will look like as it further progresses.
On the other side of this is a global imperative that we modernize the global financial architecture. It's just like an old building: it did well and then along comes an earthquake that was totally unexpected—off the Richter scale if you like—and proved to be almost too big to handle.
The financial sector most importantly is a global marketplace, so all of this needs to be fully coordinated at the global level; hence, the activities of the Bank for International Settlements, and the FSB, which Governor Carney heads up at this point. So that gives us the opportunity to all talk about what are the needs, to agree on principles, and then everybody does the same thing, so that we get a level playing field. It's a very important ingredient.
Since then, there's been a massive strengthening in capitalization. Most countries and certainly most banks—all of our banks—are way ahead of schedule in this. So a significant increase in capitalization, an increase in liquidity requirements that go beyond this.... If you ask me if the banking system today in Canada or globally is stronger than it was back in 2007, absolutely it is. It's more resilient today than it ever has been. Still there is work to be done, and it's a very active area.
In particular, we haven't yet found a full-fledged remedy globally for the too-big-to-fail problem, which is very important. If you have an institution that is likely to fail, it is infectious, and it infects your entire system. It therefore leads authorities to do a bailout to protect the system. We saw that a few times during this crisis.
The idea then is to create an infrastructure that allows us not to have that—what we call bail-in—or resolution plans, or both. If you have a full plan of how a particular institution would be resolved if it ran into those kinds of problems, then you just tell everybody it's happening, and then it doesn't infect the rest of the system. That's a very simplistic way to summarize it. It's a very complex issue because financial systems vary a lot around the world. Again, we're looking for the level playing field where everybody can do the same thing. So it will be ongoing, but I'm very encouraged by that progress.