In the decades preceding Stage Three of EMU, the NCBs forming the Eurosystem accumulated a wealth of mutually consistent yet diverse experiences and views. The ECB’s strategy has provided a commonly accepted framework within which these various experiences and views contribute to policy decisions. I can assure you that we will build on this continuity with our previous experience also in the future.
Obviously, there is a risk that stricter banking regulation will set incentives to move business to less regulated parts of the financial system, thus causing regulatory arbitrage. The thirdpressing issue is the inherent bias of the financial system towards pro-cyclicality.