At the end of the day, a significant share of financial market activities was outside the focus of regulators and supervisors. This leads me directly to another issue with regard to supervision and financial stability. In my view, the constant and rapid development of new financial instruments, valuation models or legal structures poses a particular challenge to financial authorities.
What we need is a speedy transfer of insights gained in international financial markets into our supervisory work. And this is one of the many reasons why central banks should be involved in supervision. The current turmoil has clearly demonstrated how important the interaction between central banks and supervisors is.