On the crisis prevention side, it has now been agreed that there is a need to reinforce multilateral surveillance at the global level. To this end, the FSF and the IMF will intensify their cooperation with a view to enhancing the assessment of financial stability risks on a global scale as well as to coordinating possible policy responses. This endeavour should be mirrored at the national and the regional level by heightening the level of cooperation and exchange of information between central banks and supervisory authorities to establish an overall better monitoring and assessment of the risks to the financial system. On the crisis management side, the ECB focuses on central bank operations and on crossborder arrangements between financial authorities. With regard to central bank operations, I would underline that we need to ensure that central banks’ operational frameworks are flexible enough to deal with extraordinary situations. In this respect, the Eurosystem’s framework is very flexible. In terms of cross-border arrangements between financial authorities, I would stress the urgent need for enhancing cross-border arrangements between banking supervisors for dealing with weak banks. In fact, the global nature of financial markets and the increasing interlinkages between markets and institutions mean that the systemic impact of a financial crisis can only be properly assessed if supervisory authorities share information on the risk exposures of large institutions and on the impact of shocks in their jurisdiction. In addition, supervisory cooperation should be intensified on a cross-sector basis.
It is such action, called for at the level of the international community three days ago in Washington by the G7, the IMFC and the G20, that the Europeans considered indispensable, particularly in the euro area last Sunday, with the adoption of a concerted European action plan. This plan has six dimensions: ensuring appropriate liquidity; facilitating the funding of banks through various means (guarantee, insurance or similar arrangements for new medium-term – up to five years – bank senior debt issuance); providing additional capital resources to financial institutions; recapitalisation of distressed banks; ensuring appropriate implementation of accounting rules; and enhancing cooperation among European countries. The very day after the meeting, namely yesterday, a large number of euro area countries displayed their implementation of the Eurogroup commitments at the level of the Heads of State and Government. I will not hide the fact that I am impressed by the degree of responsibility and decisiveness that was demonstrated last Sunday and this week in the euro area. I am impressed by the will of the countries that share the single currency not only to work together, but also very closely with the United Kingdom and all EU Member States. And I see that the new decisions taken in the United States are further reinforcing this very impressive implementation of the plan that has been approved by the international community. This is no time for complacency. Central banks will remain solid anchors of stability and confidence.