These have been ineffective, however, as has been painfully revealed by the crisis. We have learned that such warnings are not effective unless they are translated into action and that we need to pay more attention to system-wide risks.
In light of these and other lessons, a high-level group chaired by Jacques de Larosière recently made specific proposals on the structure for financial supervision in Europe. According to the De Larosière group, a European Systemic Risk Council should be set up to strengthen macro-prudential supervision. Likewise, the group recommends establishing a European System of Financial Supervisors to strengthen micro-prudential supervision.