as well as the safety and soundness of each individual institution and system. indeed, the crisis has demonstrated that a too - narrow focus on the safety and soundness of individual institutions or systems can result in a failure to detect and thwart emerging threats to financial stability that cut across many firms or markets. a critical building block of a successful systemic, or macroprudential, approach to supervision is a requirement that all systemically important financial firms be subject to consolidated supervision. that is, one regulator must be responsible and able to review the full range of activities of such firms. before the recent financial crisis, many major financial firms – including investment banks like bear stearns and lehman brothers and large insurance companies like american international group – were able to avoid robust comprehensive supervision. in the future, all firms that present systemic risks – regardless of whether they happen to own an insured depository institution – must be subject to a common, comprehensive framework of supervision and regulation. the financial reform bills that were passed in both the house and the senate would expand and strengthen consolidated supervision of firms whose failure would pose risks to the financial system. the report recommends that a single systemic regulator be assigned responsibility for overseeing the health of the overall financial system and, in particular, that this duty be assigned to the central bank. we agree that the central bank – in the united states, the federal reserve – should be extensively involved in the collective effort to promote financial stability. the reasons for this involvement include the central bank ’ s breadth of expertise and its traditional roles in promoting financial stability and serving as a backstop liquidity provider to the financial system. however, giving all macroprudential responsibilities to a single agency risks creating regulatory blind spots, as – in the united states, at least – the skills and experience needed to oversee the many parts of our complex financial system are distributed across a number of regulatory agencies. rather than concentrating all macroprudential authorities in a single agency, we prefer that all regulators be required to routinely factor macroprudential considerations into their supervision, thus helping ensure that risks to financial stability can be addressed wherever they arise. for similar reasons, we have supported the creation of a systemic risk council made up of the financial supervisors. such a council would provide a forum for agencies with differing responsibilities and perspectives to share information and approaches, and would facilitate identification and mitigation of emerging threats to financial stability. at the same time, consistent with the report ’ s recommendation that the lines of accountability for

won ’ t. we are all too aware that low impact entities such as, for example, retail intermediaries, can also cause consumer detriment through overcharging, mis - selling and poor systems and controls. there will be a different approach to low impact firms but they will not fly beneath our radar and will not have an easier time. we plan to monitor the financial aspects of these firms through semi - automatic reviews of their on - line returns as our technology infrastructure evolves. our on - line returns programme, when combined with prism key risk indicators drawn from those returns and prism reporting functionality, is helping us advance rapidly down the automation route. we will box smarter through greater use of technology and make sure that the supervisory teams overseeing low impact firms are resourced to do focused thematic work, carefully targeted at higher risk areas, taking action when problems are identified. while we won ’ t be doing regular face - to - face meetings with every low impact firm, that doesn ’ t mean we won ’ t be watching them and that we can ’ t follow up when we discover wrongdoing. we may, on occasion, conduct spot - check inspections of low impact firms. we use themed inspections of regulated financial service providers to ensure that firms are meeting appropriate standards in terms of market conduct, consumer protection and financial crime controls, such anti - money laundering. so far this year, our consumer protection directorate has carried out some 77 inspections over eight themes, including an inspection on product design and selling, on openness and transparency and on current account switching. over the last 18 months, the central bank has targeted over a dozen investment firms and subjected them to a heightened level of prudential supervision. in some cases, this work has been augmented by themed inspections on consumer protection matters. in almost all cases, issues were identified requiring outcome focused mitigating actions ranging from improved governance arrangements to revocation of authorisation. themed inspections will continue to be an important supervisory tool, and going forward, we will publish our intended thematic work plan. a themed inspection focuses on a specific topic rather than on a range of topics and is usually carried out on a number of relevant regulated firms or on firms that represent a significant proportion of market share – in line with our riskbased approach. themes and firms for inspection are selected based on our market intelligence from a range of sources, including issues noted during on - going supervision, complaints received and referrals from the financial services ombudsman