play a major role in the esrb. however, wherever central banks are involved in financial supervision, it is imperative that this does not compromise their independence and their primary objective, which is to maintain price stability. 5. conclusion ladies and gentlemen there is no doubt that the regulatory and supervisory framework has to reflect the global nature of the financial system. nonetheless, heterogeneous national structures make it imperative to maintain a certain degree of flexibility when reforming regulation and supervision. to strike the balance between uniformity and subsidiarity is certainly a formidable challenge but i am confident that we will eventually succeed and create a more stable and more resilient financial system. thank you for your attention. bis central bankers ’ speeches

accommodate country - level differences or to deal with any unintended consequences that emerge after the rules have come into effect. 3. reforming the supervisory framework the reform of supervisory structures involves a similar trade - off, though it is tilted somewhat more in favour of national particularities ; national supervisors naturally have a more intimate knowledge of local financial institutions than supranational supervisors. nevertheless, it is clear from the experiences of the crisis that financial supervision requires a higher degree of international cooperation : firstly because international banks operate and are supervised in different jurisdictions ; and secondly because of potential systemic risks, which are predominantly a cross - border phenomenon. bis central bankers ’ speeches to facilitate the supervision of international banks, the european system of financial supervisors ( esfs ) has been set up. part of this system is the european banking authority ( eba ), which is responsible for supervising the banking sector. to allow for adequate subsidiarity, the eba follows a members - based approach where national supervisors are members of boards and working groups. with regard to systemic risk, establishing international cooperation is particularly important. to strengthen the macroprudential approach which supplements the traditional microprudential approach, the focus of supervision has to be broadened from the level of the individual bank to the systemic level. this can and will be achieved by various means. institutionally, an important element is the european systemic risk board ( esrb ), which has been created as part of the esfs. its task is to detect systemic risks early on and to issue individual member states with warnings and recommendations. nevertheless, as the esrb has no powers to enforce its recommendations, it remains the responsibility of national governments to ensure that recommendations are followed. 4. the role of central banks now, as a last point, let me say a few words on the role of central banks in this new regulatory and supervisory framework. naturally, central banks have a strong interest in financial stability, as only a stable financial system allows monetary policy measures to be implemented efficiently. at the same time, central banks have great expertise in all matters concerning the financial system. consequently, they already play, and should continue to play, a prominent role in safeguarding financial stability at the microprudential as well as at the macroprudential level. at the microprudential level, central banks in many countries are involved in the supervision of individual banks. in addition, they naturally analyse developments at the macroprudential level extensively and consequently