Its objective is to conduct surveys to collect household-level data on households’ income, expenditure, assets, debt and collateral. The data can then be aggregated to gauge a measure of distress of individual households and to calculate credit risk indicators, such as the probability of default, exposure at default or loss given default. Such indicators can then be subject to stress tests for which a scenario can combine an unemployment shock with an interest rate shock and a house price shock. Had such data been available prior to the crisis, it would have facilitated the identification of household borrowing and spending exuberance in several countries at an earlier stage. •  There is the Macro-prudential Research Network (MaRs). Its objective is to develop core conceptual frameworks, models and tools that provide research support in order to improve macro-prudential supervision in the European Union. The work performed under MaRs can yield more complex economic, financial and monetary indicators that can more adequately address the complexities inherent in the euro area. In the context of MaRs and also resulting from work in our own Department of Macroprudential Policy and Financial Stability, we have developed analytical tools that include, for instance, early warning systems that can go to the level of individual banks, decision tree risk models, structural VARs and Global VARs , contagion network models and top-down stress test models for banks. One of the least acknowledged outcomes of the crisis is the wealth of tools and models now available for conducting in-depth economic, monetary and financial stability analyses.

Looking at on-going developments, we are better able to interpret the current situation and assess the fiscal and monetary stances. A good example of this improved understanding is the development of the SYNFINT, the Synthetic Financial Integration Indicator, presented in our Report and that is based on measures of crosscountry price dispersion in the money, bond, equity and banking markets in euro area countries. Looking ahead, we are also better equipped to warn about looming systemic risks or adjustment failings, as well as to identify strengths. 9 Macro-prudential policy will have an important role to play One of the more important goals of the on-going research is the grounding and calibration of macroprudential instruments. The need for a macro-prudential perspective is one of the main lessons stemming from the crisis. In fact, the whole regulatory reform after the crisis was internationally discussed in Basle or in the FSB and the G20, from the macro-prudential perspective. Indeed improving the design of Financial Regulation to ensure a resilient system is the first instrument of macro-prudential policy. I see macro-prudential policy as particularly important for the single currency, as macroprudential tools can in principle allow policymakers to address financial imbalances in a more country-specific and granular way. 9  See Fecht, Gruener and Hartmann, “Financial integration, specialization and systemic risk”, Journal of International Economics, Vol. 88, 2012. BIS central bankers’ speeches  5  I acknowledge that we do not yet have a large body of evidence on the effectiveness of these policies, especially in advanced economies.