be chaired by the central bank representative given that central banks have a more “ top down ” perspective, focusing on the system as a whole, 16 while prudential agencies ( or central bank supervisory departments for that matter ) have traditionally approached issues from the “ bottom up ” perspective of individual institutions. the ecb was denied responsibility for supervisory oversight on the grounds that this might dilute its commitment to monetary stability. it is ironic that, more recently, the ecb has justified retention of the second pillar on the grounds that it can provide an early warning of financial excesses. see goodhart et al ( 2002 ). central banks would also be more likely to incorporate macroeconomic considerations into their analysis. thus, the build - up of corporate or household debt might be thought worrisome even if the health of financial institutions was not thought to be at risk. it is notable that a committee of this type already exists at the international level - the financial stability forum - though not yet in most national jurisdictions. this committee brings together senior treasury, central bank and supervisory officials from systemically important countries, along with representatives of the major international financial institutions and the standing committees of the bis. the committee routinely assesses financial vulnerabilities arising from conjunctural developments as well as from ongoing structural change. while the committee as such has no powers - it is not a super - regulator17 - the insights gained from its deliberations seem on occasion to have led to changes in domestic prudential if not yet monetary policies. the forum might also have a role to play in the event of an international financial crisis needing management or resolution. fortunately, this capacity has not been tested to date. 3. current impediments to effective macroprudential action the previous section has set out an “ idealised ” framework for the implementation of macroprudential policies. in addition to the many legitimate questions that might be raised about the desirability of the suggestions made, there are a number of practical impediments to implementation of any sort of macroprudential framework. forbearance can be an issue at the systemic as well as the institutional level. some of these impediments are of a general nature, others affect prudential authorities in particular, while still others affect the conduct of the monetary authorities. after identifying the nature of these impediments, consideration is then given as to how they might be removed. in addition to normal bureaucratic inert

regard, in order to improve the efficiency of financial regulation across markets and jurisdictions. looking forward potential new risks stemming from micro - structural issues such bis central bankers ’ speeches as ucits exchange - traded funds and high frequency trading, which i mentioned before, need to be properly addressed. regarding the access of credit institutions to central bank funding, their eligibility should be based on their financial soundness, as assessed through their solvency and liquidity robustness. it is therefore of crucial importance for central banks to have access to relevant and detailed micro - prudential information and assessments on their monetary policy counterparts. moreover, this assessment cannot be dissociated from prudential information on the banking group to which the respective counterpart belongs. this calls for an enhanced participation by central banks and their involvement both in the eu college of supervisors and cross border stability groups. before i conclude, i think it would be appropriate to point out that the increased level of interconnectedness of financial systems and banking groups highlights the need for improved cross - border cooperation and crisis management. finally, let me mention human capital requirements as another key area which often goes, unmentioned yet is important for improving the quality and efficacy of supervision. by combining the competencies and skills of supervisors and central banks, the ese initiative certainly contributes to enhancing the convergence of practices. under this welcome initiative, the efforts of the banque centrale du luxembourg will continue to enhance the approach adopted by the ese initiative. ladies and gentlemen, i wish you a pleasant stay in luxembourg, and an interesting and successful conference. i am sure the presentations as well as the panel discussions will include interesting and fresh ideas and insights from which all participants can benefit in their ongoing tasks, be it at local or cross - border level. bis central bankers ’ speeches