of the analysis of policy issues relating to financial regulation and supervision, financial stability arrangements ( e. g. financial crisis management and resolution ) and other financial services areas ( e. g. accounting ). this work encompasses the regular monitoring and assessment of developments in these areas as well as contributing to european and international discussions on regulatory and supervisory issues. this three - pronged approach allows us to focus on the distinct but complementary activities related to financial stability surveillance, systemic risk assessment and policy responses, respectively, while still ensuring that interlinkages between these elements are considered in bis central bankers ’ speeches an integrated manner when providing financial stability advice to the decision - making bodies of the eurosystem, the european systemic risk board and to the wider public. the ecb financial stability review is only one example of product where the three elements are developed. we are living difficult times and need state of the art tools and indicators for analysis. as mentioned before, we are currently living in an extremely complex and difficult macroeconomic situation. the financial crisis, if anything, revealed that we need to understand much better the interactions between the financial and real economic sectors. particularly, the concepts and analytical tools underlying financial stability and macro - prudential analysis were found somewhat deficient to properly guide policymakers trying to steer through the crisis. this has underlined the need for “ state - of - the - art ” tools and indicators for conducting financial stability analysis. indeed, especially during the past five years the academic research has very much enhanced the analytical toolbox that we have available to properly analyse and assess the pertinent financial stability issues of the day. further enhancements are, of course, needed and i can only encourage the academic community to continue in this direction as it will greatly help policy makers when trying to understand and ultimately address financial stability issues of a systemic nature. also in this light, it is my expectation that today and tomorrow ’ s conference will provide us with cutting - edge research in the financial stability area ; thus providing a highly useful stock taking of the progress made in recent years, while ideally also pointing towards areas where further improvements are still needed. need to rethink also policies and policy frameworks the conference will conclude with a panel discussion on macro - prudential policies. key questions in this area include the translation of systemic risk analysis into concrete policy actions and the related challenge of developing a well - functioning macro - prudential policy toolkit. in this regard, we have to ensure that once

yves mersch : monetary policy and financial stability under one roof keynote speech by mr yves mersch, member of the executive board of the european central bank, at the 6th policy roundtable of the european central bank : “ the future of global policy coordination ”, frankfurt am main, 6 september 2013. * * * ladies and gentlemen, it is my pleasure to join you at the 6th policy roundtable of the ecb, which this year focuses on “ the future of global policy coordination ”. i will be speaking about the interaction of a particular set of policies, namely monetary, micro - prudential and macro - prudential policy. but rather than discussing the global dimension or replicating the discussion at jackson hole, i will restrict myself to the changes taking place under the roof of the ecb : the ecb taking over responsibility for elements of micro and macro - prudential supervision in the euro area. having the financial stability function under the roof of the central bank is of course nothing new. it is almost exactly hundred years since that the federal reserve act was signed into law. according to the regulation, federal reserve banks were created “ to furnish an elastic currency, to afford means of rediscounting commercial paper ” – and notably – “ to establish a more effective supervision of banking ”. this combining of monetary and supervisory functions reflects the fact that, for monetary policy authorities, financial stability is obviously key. a stable financial system with sound and solvent banks supports the smooth transmission of monetary policy and ultimately contributes to macroeconomic stability. this is particularly relevant for the euro area, where banks play and crucial role in providing financing to the real economy, most notably to smes. conversely, financial imbalances can be a genuine threat to price stability, in addition to being extremely costly from a macroeconomic perspective. but in my remarks today i would like to focus on a specific aspect of these interactions – that is, between monetary and macro - prudential policy. the key point i would like to make is that this interaction should be stronger than in the micro - prudential area, where the impending regulation imposes a separation between monetary policy and supervision. the reason for this is simple. while micro - prudential policy focuses on the stability of individual institutions, both monetary and macro - prudential policy take a more systemic perspective and aim ultimately at system - wide stability. let me explain the interaction between these two policies in more detail. in many ways – objectives