particular the single supervisory mechanism ( ssm ) and the single resolution mechanism ( srm ), has taken monetary policy one step further away from financial stability issues. progress has been made to ensure that regulatory capture and forbearance are minimised and that shareholders bear responsibility and face the consequences of failure. but we are not there yet. these mechanisms need to be complemented by a common system of deposit protection, which would further bolster financial stability by reducing the risk of bank runs in crisis times. conclusion to conclude, unconventional policies have been complicated to implement and to communicate. but they have been effective in enhancing our ability to deliver on our mandate in a medium - term perspective. our measures have been designed to complement each other and have proved adaptable to and effective against the series of shocks which have buffeted the euro area economy. the complex nature of unconventional measures has repercussions for the transparency and accountability dimension of central bank independence. but they were a sine qua non for our mandate to be respected. the challenge from the monetary policy consequences of the financial crisis has placed a particularly heavy responsibility on the ecb to explain how the measures taken fall within the ambit of its price stability mandate. non - standard measures have been designed in such a way that they cannot compensate for failures in other policy areas. the evolving institutional structure of emu is further contributing to ensuring that, if at any critical juncture in future the macroeconomy faces risks, monetary policy will be able to concentrate solely on preserving price stability. 5 / 6 bis central bankers'speeches 1 as described in barry eichengreen ( 1992 ), golden fetters : the gold standard and the great depression, 1919 – 1939, oxford university press, pp. 29 – 66, the credibility of the pre - world war i gold standard rested on international cooperation, with britain at the centre, enjoying considerable leeway in observing the rules of the game, and france, germany, and others willing to support sterling ’ s stability. the united states, at the time an agricultural exporter and a foreign borrower, with the federal reserve system not yet operating, faced more binding constraints. seasonal swings in the demand for money, for example, triggered gold flows which could not be absorbed, thereby causing periods of deflation. 2 for a critical appraisal, see charles goodhart ( 1999 ), “ myths about the lender of last resort ”, international finance, vol. 2 ( 3 )

issues are very institution - and country - specific, and are therefore better addressed through individual conversations with an institution and their relevant supervisors. the federal reserve continues to be an active participant in supervisory working groups for all large u. s. and foreign banking organizations in the u. s. and we are encouraged by the level of cooperation and pragmatism coming out of these efforts. for example, supervisory planning efforts for u. s. - based banking organizations for the upcoming year are reviewed with foreign supervisory authorities to ensure that, regardless of basel ii timing issues, information pertaining to ongoing supervisory judgments of risk management practices is available. we have also been encouraged by the dialogue with our foreign colleagues regarding their desire to provide flexibility in transitional arrangements. i would add that we have benefited from the numerous meetings and exchanges we have had with groups such as yours to help us identify the most critical areas to examine for further convergence globally. we will be evaluating all of that input closely as a part of our rulemaking process. as always, we encourage bankers who have questions and concerns about home - host issues to communicate promptly with their regulators in all jurisdictions so that the issues can be addressed. another key point, when talking about differences across countries, relates to findings from recent basel ii quantitative impact studies ( qis4 and qis5 ). interestingly, the two exercises identified a number of similar issues, some in areas in which institutions were not able to provide adequate data ( especially for downturn scenarios ). in the united states, qis4 was conducted before the release of the basel ii npr, while in europe, qis5 was conducted only after the passage of eu legislation implementing basel ii. therefore, much of what was learned by u. s. supervisors in qis4 is included in the npr, such as the supervisory mapping function for downturn estimates of loss given default. european supervisors, on the other hand, did not have the benefit of information from qis5 when they were drafting their rules. while i cannot speak for my european counterparts, no doubt some of the issues raised in qis5 will be addressed during implementation in europe. it is possible that differences in basel ii implementation may mean that the u. s. version of basel ii is in some aspects more conservative than other countries'versions. in other areas, the u. s. proposals may be less conservative. but, as i noted, national differences in capital regulation are not unique to the basel ii capital regime. over