was to re - establish financial stability and bolster resilience to financial shocks. but in the implementation process of the new basel 3 rules, we need to pay the utmost attention to their potential consequences for the financing of the economy, especially in view of the much shorter agenda. in particular, the new liquidity rules need to be adjusted. in addition, much more progress is now needed in the area of “ shadow banking ”. 2. since the beginning of the crisis, the eurosystem has constantly provided all possible support within the scope of its mandate to help the banking system overcome its difficulties. for instance, the idea of the two ltros was to remove funding pressures in order to allow a smoother adaptation to the new rules and difficult environment. simultaneously, this aimed to prevent a major credit crunch that would compromise both the financing of the economy and the maintenance of price stability in the area. we will continue to pursue these goals, with no concessions to our primary mandate and our independence. 3. beyond this action of the eurosystem entrenched in the treaty, the euro area needs a new and concrete leap towards stronger financial integration. it is true that we have made enormous progress for more regulation and created new tools, but the different episodes of the crisis have demonstrated that a monetary union can be stronger if it relies on a financial system whose health is not ultimately dependent on national mechanisms : – the homogeneous health of the financial system is key for the proper transmission of a single euro area monetary policy ; – as long as the euro area ’ s financial health is vulnerable to problems in one country, negative feedback loops between sovereign and banking risks can materialise – this is precisely what happened in the euro area ; – in a monetary union, capital is free to move very quickly from one country to another, thereby augmenting the potential incidence of “ bank runs ” if no supranational deposit guarantee mechanism is in place. therefore, we have to build a truly federal authority in the euro zone, a structure combining the us fdic ’ s functions with the ones of the us federal reserve system would be a major advantage for the future of the euro area. it should have three main powers : – banking supervision ( possibly the same kind of structure as the eurosystem with one “ head ” and decentralised implementation ) ; – deposit guarantee, with massive firepower, provided that it could collect a tax on every euro area bank and could borrow on the markets with a su

address the threat to the information systems. the forums such as this provide great opportunity to interact bis central bankers ’ speeches and understand the role that each one of us has to play and to also ensure that our actions and plans are complementary and not at cross purposes. cyber security preparedness – five commandments for safety in banking 14. let me start with a most common requirement. thou shall know your customer – which is my first commandment. all of us are aware of the requirements relating to know your customer or kyc as commonly referred to. much has been said, discussed and detailed about kyc that i shall not repeat all of them ; suffice to say now that it is essential to know our customer well or else we shall have to face the consequences which may be detrimental to our business objectives. 15. the second commandment of mine states that thou shall know your employee. most of the cyber frauds have some direct or indirect role of an insider, who generally happens to be an employee of the organisation which has been the target of the cyber security attack. there is an urgent need for an organisation to not only perform the antecedent verification of an employee at the time of recruitment, but also continuously monitor employee behaviour, trends in operational usage of the organisational resources, interaction levels with peers and subordinates and the like. today, it tools provide a lot of information on employee behaviour and patterns ; it is essential that organisations ascribe adequate importance to these aspects. 16. the third commandment reads as follows : thou shall keep your it systems up - to - date and free of all risky components such as viruses, spams, malware, spoofing software and so on. today, there are centralised it system facilities which can ensure that the updates are implemented centrally and also monitored centrally. 17. the fourth commandment is thou shall provide for maximum it governance. the broad requirement in this area relates to the need for ensuring good it practices such as ‘ maker and checker ’ for financial transaction processing, a four - eyes principle for it based operations, regular monitoring of system and operational logs, conduct of regular, periodical and well defined it system audit followed by suitable corrective action wherever required, and a separate distinct ciso ( chief information security officer ) who would continuously monitor the quality and efficacy of it and is security in the organisation. 18. my final commandment is thou shall ensure continued cyber security awareness amongst all players in the chain. the world of