must have a coherent and resilient organization. we must not yield to the temptation to maximize netting effects. we all agree that the primary objective of central clearing is to reduce systemic risk. ccps cannot be considered primarily as vehicles for improving operational and capital efficiency. they should be as well financial stability enhancers. the proposed merger of the london stock exchange group and deutsche borse might be a relevant illustration of the risk of a trade - off between these two objectives. so we will closely look at it from a financial stability perspective, as i already said. it is also industry ’ s responsibility to locate ccps in the appropriate currency area, to enhance the management of liquidity risk, which is essential for ccps ’ resilience. clearing members are also responsible for steering ccp risk management towards best practices. their participation in the governance of ccps is key in this regard. this should be bis central bankers ’ speeches materialised by regular feedback on ccps ’ methodology and stress test results, which should be disclosed to participants. when considering regulators and overseers, the priority must be to constantly improve ccp resilience, building on the cpmi - iosco principles for financial market infrastructures. we must avoid regulatory arbitrage and competition through the reduction of prudential requirements. this means tighter international harmonization of ccp requirements. in this regard, i salute the important work currently carried out by cpmi - iosco to promote more granular guidance and steer ccps towards best practices. this includes the alignment of incentives among market stakeholders to improve risk management. this can be illustrated with the promotion of the “ skin in the game ” for ccps in the default waterfall, which aligns the incentives of ccp shareholders with those of clearing members. this should also include the conduct of frequent supervisory stress tests for ccps, to bring more comfort with regard to their resilience. it would create an objective external metric to ensure the adequacy and the consistency of their risk practices. this needs to be developed to assess the management of credit risk but also of liquidity risk, which is too often ignored. finally, let me say a last few words to introduce the precise topic of this conference. as you know, regulations require ccps to consider all extreme but plausible scenarios in their daily risk management. however, we cannot ignore tail risk. the remote possibility that ccp resources would be exhausted in a crisis must be dealt with appropriately. this is why we

strong case for a euro area finance minister in order to implement them. he would be president of the eurogroup and a member of the european commission, as mentioned in the european commission ’ s proposals published in december 2017. as a compromise between rules and discretion, this finance minister could rely on the expert advice of an independent institution such as a strengthened european fiscal board. let me sum up. it is high time we took pragmatic and decisive steps, beyond the three old cliches which are impeding progress towards a more sustainable european monetary union. they draw a pointless distinction between vision and pragmatism, european - level action and national reforms, and between risk reduction and risk sharing. there are three solutions : first, a “ financing union for investment and innovation " ; second, better coordination of economic policies supplemented by a stability - oriented instrument within the esm ( or emf ) ; and third, a euro area investment budget for the financing of common goods. thank you for your attention. 3 / 3 bis central bankers'speeches