Having said that, the ECB would still like to see accounting standard setters take better account of financial stability implications when revising existing or creating new accounting standards, as for instance indicated by the IASB on the occasion of setting up the “enhanced technical dialogue” with prudential supervisors in 2009. One concrete and important area where the IASB can prove that it takes duly into account financial stability implications would be the on-going discussions on introducing more forward-looking provisioning. BIS Review 58/2010  3  In this sense, the ECB looks forward to continuing the close dialogue with the IASB on the accounting projects that lie ahead. More generally, please indicate two essential measures for financial regulation in the current debate. The ECB firmly believes that momentum should be maintained with regard to the global regulatory reform agenda. We need to ensure we put in place a regulatory framework that will enhance the resilience and stability of the global financial system. Under the aegis of the G20, the international community has agreed on a comprehensive set of measures that reflect a substantive revamp of the regulatory framework. Going forward, I would mention three key priority areas. First, the global community should commit to implementing the so-called Basel III proposals on capital and liquidity issued in December of last year. The ECB supports these proposals which are designed to put banks in the position to better withstand the effects of future crises.
Second, financial system transformation affects the implementation of monetary policy. I will give you an example. Our weekly main refinancing operations with money market counterparties are conducted on the basis of repurchase agreements ("repos"). This requires a list of eligible collateral for such operations. In a changing financial environment, a central bank has to ensure that eligible collateral allows market participants to have efficient and equal access to central bank liquidity. My third example of the importance of financial system transformation to central banks relates to the payment systems function. Most central banks in industrialised countries run a large-value payment system and are involved in the oversight of other payment and securities settlement systems. For reasons of efficient liquidity management by private banks, the Eurosystem's TARGET system allows for intra-day overdrafts that are fully collateralised. For TARGET to perform efficiently, it is therefore very important that securities settlement systems are interlinked or consolidated in a way which allows a smooth flow of collateral across the euro area. Fourth, past experience has shown that structural change in financial systems may have an impact on financial stability. Hence, the structure and modus operandi of the authorities responsible for supervising financial markets and institutions must be designed to prevent any instability from arising. This is, as you are aware, quite a topical issue in the European Union. Central banks have a genuine interest in this issue, which clearly has its origins in the Treaty on European Union.