The three questions that I would like to address are: why is macro-prudential supervision desirable for the European Union; how should it be organised; and what are the implications for the financial sector? Let me look at the question of desirability first. The financial crisis has been revealing in many respects.
It has revealed the scale of the potential fallout from the failure of large financial institutions. It has revealed the fragility of the financial system to features and trends that cut across institutions, markets and infrastructures. And it has illustrated the amplitude of the consequences of the adverse feedback loop between the financial system and the real economy.