action by public authorities was instrumental in limiting possible cross - border spillovers in the recent crisis. to illustrate this point, let me just quickly recall that the eurosystem and other central banks have ensured adequate access to central bank funding to liquidity - constrained but solvent banks. governments, on their part, in a concerted and coordinated manner granted guarantees on new issuances of bank debt. they in addition committed to providing banks with additional capital resources, and jointly decided to raise the level of protection of deposits. the eurosystem has contributed to this work by proposing a set of recommendations on the appropriate framework for both the granting of government guarantees and the recapitalisation measures for financially sound banks. with regard to the government guarantees, the eurosystem recommendations provided not only overarching objectives but also specific parameters for the pricing system. in these recommendations, we have stressed the importance of supporting solvent but liquidity constrained banks and preserving the level playing field. in addition, consistency with the eurosystem ’ s liquidity management should be ensured so as not to impair the implementation of the single monetary policy. with regard to the recapitalisation measures, the eurosystem, in collaboration with the european commission, also contributed by elaborating a common framework for the pricing of different forms of capitalisation instruments. these measures aim to strengthen the capital position of fundamentally sound banks and to restore a smooth flow of credit to the economy. at the same time, they aim to preserve a level playing field and avoid undue distortions in competition. it is in addition important to ensure that the temporary nature of the government measures is preserved and that private investors are not being discouraged. the methodology of the eurosystem has been incorporated in the commission ’ s communication on the recapitalisation of financial institutions. finally, coordinated action was very important in the granting of state deposit guarantees. we all saw how initially uncoordinated initiatives immediately led to spill - overs with potential detrimental effects for banks in other countries that did not enjoy a similar level of protection. timely concerted action among member states led to a joint decision to raise the level of protection of deposits. the action was accompanied by a prompt initiative by the commission to amend the deposit guarantee schemes directive. this amendment had the full support of the ecb. the recent events have shown how the member states and the eu institutions can act in a rapid and coordinated manner when necessary. however, there is no room for complace

supervisor, which is chairing the college, and the authorities that are responsible for the significant branches and subsidiaries of the cross - border group. now allow me to make some comments as regards the envisaged role of the colleges of supervisors and the commission ’ s proposal. in general, i believe that the colleges will improve supervisory cooperation, in particular as regards the effectiveness, efficiency and consistency of the supervisory action. first, in terms of effectiveness, the colleges should facilitate the information exchange on a cross - border group and enable all the involved supervisors to have full knowledge of the overall risk profile of the group. moreover, the colleges should improve the coordination of supervision and risk assessment, both as regards consolidated and solo supervision, and arrange for the division of tasks. second, the colleges should over time become the main supervisory interface for the banking groups. this would lead to higher efficiency, as any unnecessary duplication of supervisory requirements should be avoided. third, the common legal underpinnings for the colleges in the revised crd will ensure consistency across colleges. in addition, the ecb supports the work by the cebs on developing operational guidelines. these guidelines have the aim to further align the working procedures of the colleges, the efficacy of their decision - making bodies, and the coherence of the practices used across colleges. however, it remains to be seen whether such a framework will suffice, or whether further improvements will be needed. the key challenges now lie in its implementation. let me mention some examples in this regard. first, the effectiveness of the colleges depends on their ability to facilitate decisionmaking for the banking group as a whole. the crd is expected to introduce some rules on the decision - making process should the authorities disagree on essential decisions concerning supervision of cross - border banking groups. recent events clearly underscore that swift decision - making is of the essence ; we cannot afford to have a cumbersome decision - making process in case of disagreements. second, the coordination role of level 3 committees would be of critical importance to ensure consistency of supervisory actions across colleges. finally, let me stress the importance of effective information exchange. first, communication between the home and host supervisors within the colleges is crucial for the full understanding of the risk profile of the group. second, the financial turmoil has highlighted the importance of information sharing between central banks and supervisors for the identification and assessment of risks to financial stability. moving from crisis prevention to crisis management, i would like to stress that the well coordinated