This is especially valid with respect to the area of macro-prudential tools and instruments, in view of the significant differences across countries in their initial conditions or stages of development and convergence. Starting with the obvious focus of interest for every central bank – namely monetary policy – I would like to remind you that the BNB is among the few central banks in the world with such recent know-how in two remarkably contrasting monetary policy regimes. Since the start of transition from the centrally planned economy 25 years ago and the restoration of the traditional two-tier banking system in Bulgaria, we initially practiced discretionary monetary policy, and then after our crisis, we introduced the currency board arrangements in 1997. In addition to conducting monetary policy aimed at maintaining price stability, the BNB was traditionally entrusted with the regulation and supervision of the Bulgarian banking system. The banking regulations in Bulgaria and the supervisory powers of the BNB were strengthened after our crisis in the mid-1990s. The BNB has ever since persisted in implementing highly conservative supervisory standards. As a result, today the banking system of Bulgaria remains one of those in the EU where no single bank needed to be rescued or supported with taxpayers’ or central bank money. Furthermore, our banking system is already in full compliance with the new Capital Requirements Directive and the Capital Requirements Regulation.
Of course, since new forms of shadow banking activities are certain to develop in the future, FSB members will continue to monitor for emerging risks, and share data and analysis in order to support any future regulatory response. 9 The data refer to the UK, the US and the Euro Area, as of June 2009 (see Bank of England Financial Stability Report, June 2009). 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  These include reforms to secure the tools and powers authorities need to deal decisively with failing banks. At the same time, major banks are required to make themselves easier to resolve, including by writing ‘living wills’. Most importantly, global standards now require that banks hold sufficient debt in life such that, in the event one fails, its successor can be recapitalised to support the continued operation of its most important activities. The combination of these initiatives and the determination of authorities to complete the job explains why the too-big-to-fail public subsidy for private systemic banks has fallen by 90% in the UK. Put simply, a decade on, market discipline is coming back. The system is also fairer because we are addressing the root causes of misconduct. In the wake of the crisis, a series of scandals ranging from mis-selling to manipulation undermined trust in banking, the financial system and to a degree markets themselves. The economic consequences have been enormous.