But both of the theses I mentioned earlier are the same: When cross-border integration progresses it is important – and profitable from society’s point of view – to create credible crisis resolution mechanisms in advance. But this is rarely or never done. One sometimes talks of Europe’s “financial trilemma”.9 We in Europe want to achieve a continued financial integration and increased financial stability, but at the same time we want to retain each country's national sovereignty. The problem is that it is possible to attain two of the goals, but very difficult to attain all three. If we want to combine financial integration with continued national sovereignty over, for instance, supervision and crisis management, as we have done so far, it will be difficult to achieve meaningful financial stability – the crisis we are currently going through provides a good example of this (Figure 3). Figure 3 Financial stability  Financial integration  National sovereignty  If, on the other hand, we want to prevent cross-border crises and at the same time maintain national sovereignty, we must accept reduced financial integration – for example, stricter regulations as to how banks can move financial assets between countries (Figure 4). One can see clear tendencies in this direction in the current discussions.
Specific and rules-based regulations, while able to lead institutions in the right direction, do not guarantee the internalisation of such values within bankers nor are they dynamic enough to catch up with new ways of breaching ethics. Therefore, the Bank will also be expanding its supervisory focus on financial institutions beyond balance sheet ratios, and incorporating organisational culture in our radar such as tone from the top, echo from below, accountability, communication, remuneration and performance management. This is a challenging but necessary task that requires creativity in exploring unconventional supervisory approaches including interviews and questionnaires for employees of financial institutions among others..  Risk management as part of business strategy Finally, risk managers must move away from merely compliance and loss prevention. Risk managers must reposition themselves to be more engaged in strategic business decisions within their respective organisations. Chief Risk Officers (CROs) must have a broad and independent view of the organisation, with an ability to anticipate potential disruptions and to influence decision-making. However, according to a global survey conducted by PwC last year, only 1/3 of risk officers view themselves as part of the business. Especially now in the age of disruption, risk managers should not view themselves as mere compliance officers or the mundane department that says ‘no’ to exciting business opportunities. Instead, risk managers need to also think in terms of finding the right risk-return trade-off. Risk management must go beyond the prevention of losses and play an active role in driving business sustainability and enhancing shareholder value.