is highly transparent for the market, e. g. regarding in - house procedures, which is hardly feasible. allow me to briefly outline the german prudential approach : • banking supervision is guided by the principle that a bank's management is responsible for its business decisions. therefore, banking supervision in germany does not actively intervene in banking activities, i. e. by making specific recommendations. • from the central bank's perspective, i would like to stress that it cannot be the task of a central bank to bail out insolvent credit institutions. the ministry of finance would be responsible for that, if tax revenue were required for assistance measures. but even cases such as financially sound institutions merely having liquidity problems should, if possible, be resolved with the help of private or semi - private lenders before reaching the gates of the central bank. the liquidity consortium bank in germany is such a “ lender of penultimate resort ”. in addition to the three categories of credit institutions, the bundesbank also has a stake in this consortium bank, and it provides refinancing against collateral. apart from that, the bundesbank has not committed itself in a binding manner to take action in the event of a crisis. it would also be – 2 – desirable if a liquidity consortium bank or comparable institutions were established in other european countries. • if it were not possible for the creditworthiness of an institution to be restored either by other institutions or with the help of the deposit guarantee scheme, having that institution exit the market would, in general, be a feasible consequence. however, if such a step posed a serious threat to the stability of the banking system, i. e. if the institution in question were “ too big to fail ”, a joint solution would have to be found by all the private market players and public bodies concerned. already the number of institutions we must consider to be “ too big to fail ” has risen in the recent past, and further mergers will cause this number to keep rising. mergers of global players do not only raise new questions in banking supervision. they also pose the risk that size leads to moral hazard effects. for precisely this reason, each crisis must be assessed individually. the key principle is that the government's response must not be predictable and that private market players should be involved in potential rescue operations to the greatest possible extent. • the recent financial crises have been increasingly drawing attention to international crisis management. in my opinion, the aforementioned principles should

also important to mitigate the sources of systemic shocks. dodd - frank apparently did little to curb misconduct – a possible source of systemic risk. if the people managing capital cushions and liquidity buffers view these tools as sufficient mitigants for the costs of misconduct, or if powerful incentives encourage workarounds of the new regulations, then the connection between post - crisis reforms and greater financial stability becomes threatened. in the last year, we have seen emerging approaches to supervision that aim to address culture, conduct and governance. these methods are being developed in a number of jurisdictions. 8 i am pleased to welcome representatives of 15 foreign supervisors and other official sector agencies who are joining the many representatives of u. s. supervisory and regulatory agencies here today. the topic of culture and conduct has truly become a global dialogue. we have a lot to learn from each other. one question on the minds of many in the official sector is, “ what is the most effective way to promote reform? ” sharing ideas on leading practices, challenges and the opportunities for industry collaboration is a start – but it is not the end. financial firms need to act on this information, and the official sector should hold institutions accountable for demonstrating sustained, observable progress. overview of agenda let me now give a brief overview of today ’ s agenda. the first panel will present the group of thirty ’ s recent report on banking conduct and culture, which calls for fundamental and william c. dudley, ending too big to fail, remarks at the global economic policy forum, november 7, 2013. federal advisory council and board of governors, record of meeting, may 8, 2015. william c. dudley, enhancing financial stability by improving culture in the financial services industry, remarks at the workshop on reforming culture and behavior in the financial services industry, october 20, 2014. see, e. g., mirea raaijmakers, ed., supervision of behavior and culture : foundations, practice & future developments, de nederlandsche bank ( 2015 ). bis central bankers ’ speeches sustained change. as you all know, the group of thirty is a forum consisting of senior public officials and private sector bankers. its purpose is to facilitate non - partisan discussion of issues that threaten global economic stability and economic progress. it speaks volumes that the group has focused its work in recent years on effective governance, the role of supervision, and on conduct and culture. each of the four remaining panels will address one aspect of the multidimensional nature of