structure is maintained. 5. conclusion in my testimony today, i have sought to outline the reasons why basel ii matters so much and how it will support the continued safety and soundness of the banking system. when we motivate banks to improve their understanding and approaches to risk, i believe that banks will become less sensitive to the ups and downs of the business cycle, better able to weather periods of distress and better able to serve as a source of credit and growth to the economy. while we have completed a vast amount of work in developing the international standards, we cannot rest yet. the ultimate success of basel ii still demands a high level of dedication and energy from all of us. i commend and thank the members of the european parliament for their contributions to the international discussions on basel ii and for their hard work in european discussions on the capital adequacy directive. i know that you will give the directive careful consideration, taking account of the global environment in which european banks are operating. i would like to pledge any assistance that members of the european parliament believe may be necessary and i would be honoured to participate in future parliamentary discussions on basel ii and the directive. the considerable efforts that the european parliament, the council, the commission and the committee of european banking supervisors have already demonstrated give me great confidence that we will achieve our goals. our citizens, businesses and banks deserve nothing less than the promise and benefits of greater financial stability and more sustainable economic growth.

decision - taking processes and capital strategies. let me move now to the work under way to implement the new framework. i ’ d like to highlight two areas in this respect. 3. catalytic role in promoting supervisory co - ordination and convergence the effective implementation of basel ii will depend to a large extent on the ability of “ home supervisors ” and “ host supervisors ” of internationally active banks to co - operate efficiently. certainly one of the goals for any international framework is to foster a more level playing field for internationally active competitors. the basel committee wishes to ensure that competition between internationally active banks is driven by each bank ’ s individual strengths, rather than by differences in each country ’ s rules. basel ii is intended to promote a more level playing field for internationally active banks. yet basel ii cannot and should not be expected to create perfect harmonisation across all jurisdictions. differences in legal systems, market practices and business environments in each country make it an extremely difficult task - and, indeed, an impossible one - to even out all distinctions across all borders. our goal should instead be to facilitate the application of minimum standards and to work together, across borders, to promote a more consistent implementation and application of the new framework. this enhanced co - operation is a process that will promote consistency and convergence of supervisory practices. it will help to avoid redundant and unco - ordinated approval and validation work, thereby reducing the implementation burden on banks, and conserving supervisory resources. in this regard, the committee ’ s accord implementation group continues to encourage practical work among supervisors on applying basel ii effectively and efficiently to internationally active banking organisations. the aig is currently working with supervisors of different areas of the world to conduct a number of “ real case ” studies to gain better insight into the practicalities of co - operation between home and host supervisors. in this context, if you will permit me, i would like to speak from my perspective as a european banking supervisor, and pick up on the statement i made at the beginning of my intervention. as i said, i believe that europe is in a unique position to lead the way in the cross - border implementation of the new framework and to make faster and more tangible progress than is currently possible on a wider international basis. i think we need to seize this opportunity with both hands, because it will not just benefit us in the eu, contributing to the fulfilment of the lisbon objectives, but, i believe, will also have a positive impact beyond our borders. we