Their exposure to private equity funds is larger; together with loans to the companies in which these funds invest, it amounts to 13 per cent of their capital. Exposures are concentrated among the large banks. In the credit derivatives market the banking system is on average a net buyer of protection. The integration of the European markets brings new challenges for supervisors.
The coordination bodies created by the Lamfalussy procedure have helped to harmonize regulation and strengthen cooperation among the authorities of the various countries. In 2006 we took part in coordinated simulations of critical events, so as to be ready to cope with episodes of instability having international effects.