But it has clearly had an impact on the way their are conducted: the Eurosystem is by nature a teamwork, with built-in co-ordination mechanisms ensuring that appropriate answers are given to specific situations should they occur. The management of the 9/11 crisis offered, if need be, a good illustration of the responsiveness of the structure. Let me now turn briefly to the two specific issues that I mentioned previously. 2.2 As the integration of our Capital markets deepens, it is of utmost importance, from a financial stability viewpoint, to rely on an efficient financial and banking supervision framework. Let me offer a few remarks on this question: The success of the “Lamfalussy” process for financial markets has prompted EU authorities and Member States, through the Economic and Financial Committee and the ECOFIN, to propose its extension, inter alia, to the field of banking regulation and supervision. As a matter of principle, such an approach is welcomed, should it translate into a more flexible regulatory process and a more consistent implementation of EU regulation in Member States, and foster the convergence of supervisory practices. However, in this exercise, we must keep in mind the specificity of banking supervision and build on the accumulated experience of the relevant authorities: first, in this area, co-ordination structures have been already set up that work effectively as underlined for instance in the Brouwer reports. Second, in this area particularly, co-ordination between supervisors and Central Banks is key.

Financial stability is a situation in which the various components of the financial system - financial markets, payment and securities settlement systems, clearing systems and financial institutions - function smoothly and without interruption, with each component proving resilient to potential shocks. It would certainly be excessive to consider that an increasing risk of financial instability is the price to pay to benefit from the increasing sophistication, interconnection and integration of the world’s financial markets. This assumption remains to be borne  BIS Review 32/2003  3  out. But I would definitively advocate that the greater the interdependence, the greater the risks of contagion, the more we need to methodically and collectively search for ways and means to preclude the risks of financial instability, and prevent crises from spilling over at the global level. By their very nature and position at the heart of the financial system, central banks attach great importance to financial stability: they are responsible for price stability which contributes to financial stability. In turn, a stable financial environment makes it easier to ensure price stability. The involvement of central banks in financial stability is hence rooted in their role as issuers of money. Central banks are also responsible for the smooth functioning and fluidity of financing and settlement channels: this is the reason for their responsibility in the oversight of payment and securities settlement systems, as well as for the responsibility they often have as regards prudential supervision of credit institutions. The creation of the Monetary Union hasn’t altered these responsibilities.