sure that the lively debate ahead of us on that very relevant topic is the best way to overcome the jetlag. karl popper once said that “ without a free exchange of ideas there can be not freedom of thought. to find out whether our ideas are sound, we need other people to try them out on. ” this is what this event is all about. so, to kick off our exchange of ideas, let me try out some thoughts on you as to how financial stability might best be achieved. 2. the roles of monetary and macroprudential policy in macroeconomic management if anybody or anything has actually emerged from the crisis a winner, it is probably the word “ macroprudential ”. microprudential policies such as banking regulation and supervision are still necessary in safeguarding the soundness of individual institutions. but as it turns out, they are not enough when it comes to safeguarding the financial system as a whole. for the bis central bankers ’ speeches management of systemic financial stability risks we need an additional toolkit – macroprudential policies. and it seems to me that this assessment is by now widely shared. the role of monetary policy in this context is, however, still being debated. while macroprudential policy frameworks are still under development, we need to take a stand on whether and how monetary policy should play a supporting role without undermining its pursuit of price stability. first, we have to acknowledge that in the world we live in, macroprudential policy can never be perfectly effective – for instance because safeguarding financial stability is complicated by having to achieve multiple targets all at the same time. while maintaining price stability translates into one single target variable, that is, the average inflation rate related to the price of a consumption basket, maintaining financial stability is more complex. risks to financial stability can emanate from different sources, such as price bubbles in specific asset markets, but also reckless risk - taking by a single but systemic player, and so on. while the level and volatility in individual prices of goods and services is usually not of much concern to central bankers as long as the impact on the price index is small, the level of and volatility in particular asset prices could lead to instability of the financial sector. this is why preserving financial stability is a multi - dimensional problem. additionally, financial and business cycles do interact and the monetary policy stance does affect risk - taking by the financial sector. indeed, some current research supports

andreas dombret : capital requirements, the shadows and a level playing field – current challenges in financial regulation statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the bank of france conference “ financial regulation – stability versus uniformity. a focus on non - bank actors ”, paris, 28 september 2015. * 1. * * introduction ladies and gentlemen, mesdames, messieurs, thank you for inviting me to speak at today ’ s conference. it is a great pleasure to be here at the banque de france. the bundesbank works closely together with our colleagues and friends from the banque de france and the acpr, so there is no way i would miss this prestigious event. as a banking supervisor, my focus, as you would suspect, lies mainly on the supervision and regulation of banks. much has been done in this area since the financial crisis, and maybe some of these regulatory projects could also be assigned to non - banks. 2. higher capital requirements – not only for banks? one of the main lessons from the financial crisis was that the rules governing the banking system were rather inadequate. we saw excessive risk - taking, insufficient loss absorbing capacity and banks that were “ too big to fail ” – to name just some of the problems that led to the crisis. regarding capital requirements, the most important regulatory measure was basel iii, which introduced not only stricter capital requirements but also new liquidity rules. in the eu, crd iv and crr ensure harmonised implementation of the basel iii framework across all member states. when basel iii is fully implemented in 2019, regulatory capital requirements will be significantly higher and tougher than under basel ii, and i am sure that the financial system is already today more stable than before. but will more and better capital and new liquidity rules be enough? certainly not. and therefore, besides the basel iii regime, many other regulatory projects have been launched in response to the financial crisis. two important ones are also the topic of this panel : a regulation to solve the “ too - big - to - fail ” problem and efforts to regulate the shadow banking system. at the global level, the g20 intend to approve at their summit in november a standard that global systemically important banks will have to fulfil in future regarding their capital structure. in particular, these banks will need to ensure a minimum amount of total loss - absorbing capacity, tlac for short.