jean - claude trichet : macro - prudential supervision in europe text of the economist ’ s 2nd city lecture by mr jean - claude trichet, president of the european central bank, london, 11 december 2009. * * * ladies and gentlemen, i am very pleased to be in london today and would like to thank the economist for the opportunity to deliver this city lecture. as regards the topic, i thought that this would be an opportunity to reflect on the future macro - prudential supervision in europe. we are gradually beginning to see beyond the current crisis and consider ways to strengthen the resilience of the financial system. this is a project to which macro - prudential oversight can make an important contribution. i will begin by saying a few words on the current condition of the euro area financial system. then i will make the case for macro - prudential supervision in the single market of the european union and discuss the issue of the conduct of macro - prudential supervision. i will conclude with some remarks on the issue from the point of view of the financial sector itself. 1. the current condition of the euro area financial system let me start by saying a few words about how we at the european central bank regard the current situation in the financial system in the euro area. the ecb ’ s vice president, lucas papademos, will present our comprehensive assessment very soon, based on the publication of the next edition of the ecb ’ s financial stability review. as is the case in all significant financial systems, an overall assessment of the health and vulnerability of the euro area financial system calls for a very deep analysis. there is in particular a considerable degree of diversity in the financial performance of large financial institutions in the euro area. some are still in the process of deleveraging, while others show a rising appetite for risk. it is also quite a challenge to disentangle what can be considered “ self - sustainable ” developments in the recent market recovery from those developments that might be highly dependent on the unprecedented programmes of official support to the financial system that are still in place. as a result of these support measures – in combination with the fiscal stimulus and the improving macroeconomic outlook – the strains on the euro area ’ s financial system have been clearly diminishing over the past few months, and a financial market recovery has begun, which, in some areas, looks very significant. since march this year, improvements in financial markets have been broad - based. euro area

glenn stevens : latest economic and financial developments in australia opening statement by mr glenn stevens, governor of the reserve bank of australia, to the house of representatives standing committee on economics, sydney, 24 february 2012. * * * when we last met with the committee in august, we had entered a period of heightened uncertainty about the global economy and financial system. the investment community was focusing increasingly on the high levels of public debt in major countries, and especially on the situation in the euro area, where budgetary pressures, banking pressures and competitiveness issues within the single currency area make for a very difficult set of problems. there was considerable instability in markets. but our view at that time – tentatively – was that we were not witnessing a repeat of the events of late 2008. admittedly, the second half of 2011 saw some very anxious moments. there was a flight from risk that pushed up borrowing costs for major countries like spain and italy, but pushed them down for countries like germany and the united states to the lowest levels for more than 50 years in spite of the fiscal challenges the us itself faces. funding markets for european banks in particular effectively closed for a few months, and for other banks became much more difficult and certainly more expensive. the palpable fear before christmas that europe was on the brink of some sort of very bad financial event has lessened over our summer. the anxiety has not gone entirely away, and nor will it for some time. but the worst has not happened. financial markets, while hardly brimming with confidence, have recovered somewhat over the past couple of months. banks are able to access term funding markets again, albeit at higher cost. high - frequency gauges of business conditions and confidence have stabilised over the past couple of months in asia and north america, and even in europe. we have not seen the very steep fall that we saw in all these indicators in late 2008. the actions of the european central bank contributed greatly to the stabilisation of financing conditions, essentially by removing, for a time, questions over the funding of european banks. the efforts of european leaders to craft a stronger framework for euro - wide governance on the fiscal side have also continued. a great deal more needs to be done to place european banks and sovereigns onto a stable footing, and to boost potential growth in europe. but progress is being made. forecasts for the global economy in 2012 have been marked lower, mainly due to the effects of the problems in the euro area. revisions to