the financial system more stable and saving taxpayers ’ money. can european banking supervision solve that problem? well, it can certainly contribute by putting “ too big to fail ” banks under close observation. and yet it has to be supplemented with other measures. and here, we recently made some progress – at the global level and at the european level. at the global level, the g20 heads of governments and states have just this sunday decided on international criteria that global systemically important banks will have to fulfil in future regarding their capital structure. in particular, these banks will need a minimum amount of total loss absorbing capacity – in short tlac. this approach combines the existing minimum capital requirements with new requirements to ensure that large banks have sufficient capacity to absorb losses, both before and during resolution. tlac therefore, in my view, represents a watershed in ending “ too big to fail ”. it will allow for the orderly resolution of those banks without disrupting the financial system and while protecting taxpayers from having to foot the bill. for the tlac - concept, i wish to signal my strong support. to achieve these worthy goals, i suggest agreeing upon a figure at the upper end of the range of 16 % – 20 % proposed by the fsb. however, reaching an agreement on tlac is not the finish line of the regulatory agenda. the next months need to be used for in - depth public consultation as well as an impact study of the new rules. i hope that this study will lend support to a figure at the upper end of the proposed range. finally, after both the impact study and the public consultation, implementation is the next step, and this should not be underestimated. another major step towards solving the “ too big to fail ” problem has been taken with regard to cross - border resolution. in october, 18 global banks and the international swaps and derivatives association agreed to implement new rules on derivatives trading. whenever a large bank fails, these rules will allow authorities to temporarily suspend the right of other banks to terminate derivatives contracts. this will buy precious time to organise an orderly bis central bankers ’ speeches resolution of the failed bank. however, it is paramount that we not only have the necessary procedures in place to wind down a failed bank, but the political will to go through with it. this political will exists in germany and is a universal pre - condition for ending “ too big to fail ”. we have also made progress at the european level. the

a reliable overall picture has formed. an aim that is defined on the basis of these principles also goes a long way towards anchoring inflation expectations. people will only anchor their expectations to the targeted inflation rate if they understand what we are saying, receive guidance for the future, and believe that we have the ability and the will to achieve our aim. ultimately, by defining the aim in this way, we can factor in long - term risks to price stability. it is precisely long periods of accommodative monetary policy that potentially entail risks to financial stability. and the financial crisis showed us that turmoil in the financial markets can ultimately also have knock - on effects for the economy and price stability. but the way in which we formulate our monetary policy aim is not the only area of our strategy we need to look into. to ensure price stability, the euro area inflation rate must also be measured correctly. our chosen yardstick is the harmonised index of consumer prices ( hicp ). although rents are included in the basket of goods, the costs of living in owner - occupied property are not. if these were captured, however, these prices would gain a significant weighting. that ’ s why we should think about adding an owner - occupied housing component to the hicp going forward. and we should take a closer look at which measurement biases are still relevant. such biases were also one of the reasons behind the current level of our targeted inflation rate. [ 12 ] but price statistics have moved on since the aim was set in 2003. in germany, for example, the federal statistical [UNK] is increasingly using hedonic methods of quality adjustment for its price statistics, mainly in order to accurately capture changes in the prices of short - lived technology products, such as smartphones or printers. to be able to ensure price stability, the monetary policy toolkit has to contain the right instruments – including when policy rates are already low. as i see it, we should base our choice of tools on two principles. [ 14 ] first, the tools must be capable of influencing developments in the price level effectively. that ’ s absolutely essential. and second, any undesirable side - effects should be minimal. that ’ s why we should stick to a clear hierarchy when deploying these instruments. because the non - standard measures taken over the past few years, in particular, probably differ from traditional interest rate policy in terms of their cost - benefit ratio. i have often highlighted the risks associated