Of course, this is because the financial system is constantly changing – new instruments and markets arise and technology develops. And, as the financial system changes, the risk outlook changes too. What at first seems to be uncomplicated and “risk-free” need not be so in reality. This suggests that a broad set of macroprudential supervision instruments is needed to tackle systemic risks. … suggest a broad toolkit for macroprudential supervision So what should we bear in mind when selecting and designing tools for macroprudential supervision? Firstly, we need to be able to counteract different types of systemic risk and, for this, we clearly need different types of tool. The principle used in dealing with problems involving a tendency towards exaggerated cyclical behaviour is to variously make it more expensive and less attractive to allow risks to build up when times are good, at the same time as buffers are created that can be used when times are bad. Problems caused by the financial system’s structure should instead be approached by managing individual institutions’ contributions to total systemic risk, for example by way of specific requirements for capital buffers, strengthened requirements for transparency, or limitations on certain types of activity. Secondly, there is probably a need both for tools with a wide area of effect and for those aimed at a particular sub-market or activity. Countercyclical capital buffers are an example of a tool with a relatively wide area of effect. These are based on the total expansion in credit and cover all banks.
When one knows all about a particular “signature” or about a particular country, there is much less reason to embark into blind crisis contagion. Here is the motto I would like to be 5  BIS Review 52/2000  accepted globally by market participants: “Let us judge the quality and creditworthiness of any particular signature upon its own peculiar fundamentals, upon its own, particular, assets and liabilities”. –  On the euro, I want to stress that the euro zone has adopted a sound macro policy and has embarked in a fairly comprehensive program of structural reforms. These reforms will take time to be fully completed. But they have already boosted economic growth, job creation and the restructuring of firms. I am impressed by what has been achieved during the past years and National Central Banks as well as the ECB are strongly encouraging governments and corporate businesses to foster structural reforms and business restructuring in the future. The Eurosystem, which is the guardian of the euro for the sake of the people of Europe, knows that our fellow citizens want the single currency to be at least as solid as were their previous national currencies: in France, to give only one example, 96% of the people are calling for the euro to be at least as solid as the Franc; needless to say that it is the same in Germany and in all other countries of the Monetary Union.