Such transparency would also allow regulators to monitor and identify concentrations and trading patterns that might be related to market manipulation. In addition, if the public had more detailed information about the OTC derivatives positions of market participants, market discipline would be enhanced by providing market participants with information that would help assess risks during times of stress. Uncertainty about the valuations of complex derivatives due to the lack of price transparency was a factor that exacerbated the financial crisis. Large financial institutions became less willing to engage  BIS Review 28/2010  3  with one another because of an inability to assess the size of the exposures or to value the opaque positions held by their counterparties. My third regulatory reform concern is that the Federal Reserve’s role in regulatory oversight will be excessively constrained going forward. This threatens to throw the baby out with the bathwater. The Federal Reserve made mistakes, as did others, in the run-up to the crisis. We are fully cognizant of that, which is why we are revamping how we oversee the financial system and supervise large, systemically important institutions. To cut back our bank supervisory role significantly would be a mistake because macroprudential supervision is important; the Federal Reserve is particularly well suited to this role; and because bank supervision helps inform the Fed in its lender-of-last-resort role and in the conduct of monetary policy.
The Eurosystem has been a very efficient firefighter during the crisis and is doing its best to contribute, within its mandate, to building a more dynamic growth path for the euro area, through its monetary policy. However, the success of monetary policy still needs to be complemented with a genuine economic union to achieve the European project. This is now the responsibility of the architects, including the next governments in France and Germany. 1 business.financialpost.com/fp-comment/robert-mundell-euro-is-here... 2 If we take the rule of thumb once used by John Williams, the President of the SF Fed. 6/6  BIS central bankers' speeches