is to adopted soon ), a lot of work is being undertaken to address the problems that surfaced during the last three years in this field. i will limit myself to two comments that both evolve around the simple idea that co - ordination is crucial on these questions : · financial services are increasingly delivered on a global scale. the regulation and oversight of financial markets can no longer ignore the reality that measures taken by any country may have consequences outside that jurisdiction. hence the necessity for a reinforced dialogue between regulators, central banks and market participants as a means for managing regulatory spill - overs or frictions that otherwise could occur in highly interdependent and increasingly integrated financial markets, and more generally addressing global financial stability issues. let me recall that structures such as the financial stability forum already play a widely recognised role in fostering these exchanges and promoting co - ordination. such a dialogue is all the more necessary between the us and european authorities, as they represent the main financial centres. in that regard, the recent initiatives undertaken by the eu authorities are welcome. this dialogue should be the beginning of a sustained and deepening process of mutual understanding, co operation and, above all, commitment on transatlantic regulatory equivalence. · second, let me say a word concerning the current move towards a uniform body of accounting standards and the implementation of international accounting standards ( ias ) for listed companies. such a move is expected to bring about greater transparency and comparability in financial reporting. however, it is crucial that all the impact of such a major reform be carefully identified and analysed. in fact, as a central banker and a banking supervisor i have already expressed concerns on the potential impact of some of the proposed standards ( namely ias 32 and 39 ) on the balance sheets of credit institutions : the rationale for an extensive fair value approach needs to be pondered against the principle of prudence and the risk of introducing artificial volatility in banks ’ earnings and equity. these risks clearly show that the debate here is not only a technical one, and that standard setting bodies need to engage in a continuous dialogue with all interested parties, among them central banks and banking regulators. in this context, the recent decisions by the european commission to re - examine this question is welcomed. more generally, any project of reform has to be precisely studied in order to take duly into account financial stability concerns and to prevent risks of hidden and counterproductive effects. * * * ladies and gentlemen, i will have only one concluding remark. financial stability should

. 3 however, it appears that macroprudential tools, although necessary, are not completely sufficient to address the whole range of financial stability concerns. it is my view that central banks should take financial stability into account while setting the course of monetary policy. there is a need to overcome the strict separation principle between monetary and macroprudential policies, and adopt a coordination principle. what does this mean in practice? let me first dispel two misunderstandings and say what it is not about. it does not mean that financial stability may become a monetary policy objective in itself. the aim here would be to identify vulnerabilities that represent a threat to the price stability objective, either directly or indirectly by impairing the effective transmission of monetary policy in the medium - long term. also, it does not imply a systematic ( mechanical ) reaction to financial stability indicators, and it is very different from the “ leaning against the wind ” strategy. in addition, financial stability, unlike price stability, is not easily summarised by one statistic ( inflation in the case of price stability ), so we therefore need in any case to look at a range of indicators. what i suggest instead is a slight evolution of the ecb strategy, to achieve a more “ integrated ” framework. to formalise this approach, one option worth considering could be to renovate and extend the present second pillar into a “ financial and monetary ” pillar, alongside the economic one. more specifically, let me mention a few examples of variables that could be monitored under this new pillar : indebtedness of firms and households ; bank balance sheet information, which is useful for assessing the functioning of the bank lending channel ( including in a forward - looking way ) ; indicators of excess risk tolerance and excess credit, which provide information on the risktaking channel ; stock and house prices, which provide information on the asset price channel. this list could be of course modified and completed. in fact, we already monitor many of these variables. the point of having a structured pillar is to formalise this analysis – including on proportionality of our measures – and ensure we have no blind spots. such considerations would help us optimise the monetary policy toolkit and fine tune it with the numerous tools that central banks have now at their disposal. to some extent, we have already crossed that bridge in adapting existing instruments in order to take financial stability considerations into account. in the case of the eurosystem, two examples come to mind