countries ”, concerns about an absolute shortage of high - quality collateral assets appeared unjustified, given that the supply of collateral assets had risen significantly since the end of 2007. today, almost two years after the first joint central bank seminar, a new set of issues related to this relative scarcity of collateral is coming to the forefront. the regulatory framework is becoming clearer, but concerns are being raised about the impact of the new post - crisis regulatory regime on the financial system. eligible collateral first, i would like to focus on the aspects related to the eligibility of assets for use as collateral in central bank credit operations. as you well know, collateral eligibility criteria are defined by central banks first and foremost to protect central banks, and ultimately taxpayers, from the credit risk inherent in their credit operations with commercial banks. the eurosystem is very clear on this aspect and the bis central bankers ’ speeches “ adequacy ” of assets for use as collateral is stipulated as a condition for lending in article 18. 1 of the statute of the european system of central banks. the legal interpretation in this respect is clear and consistent. this concept of adequacy focuses on the “ qualitative ” aspect of assets that may be used as collateral with the eurosystem. the adequacy of collateral in this respect is ensured via the following pillars : ( i ) market valuation should be the rule whenever possible, ( ii ) proper legal due diligence both as regards the asset to be accepted as collateral and also as regards the collateralisation technique used ( iii ) there should be minimum credit quality requirements and stringent rules and performance monitoring for all systems used to assess the credit quality of eligible assets and ( iv ) risk control measures, normally in the form of haircuts. another point i would like to emphasise is that the eurosystem has been working to mitigate inherent pro - cyclicality in its collateral framework by extending it, by aiming at calibrating risk parameters over a medium - term horizon, avoiding strong reactions to temporary market movements, and eliminating cliff effects and broadening its acceptance of credit risk assessment systems. i would also highlight that the eurosystem ’ s collateral framework which should cater for a level playing field in the euro area through a single list of eligible assets, is an important factor in promoting the standardisation and harmonisation of relevant laws in europe. the eurosystem often has to face the fact that different aspects of securities laws in europe are not yet

##ness? yes, we see progress in all programme countries. it ’ s visible in trade balances and real price adjustments. it vindicates economic theory. ireland will soon be able to raise money on its own. spain will probably not need more support for its banks. we will see in six months whether portugal needs a follow - up programme. although the decisions of the constitutional court there remain an unknown. bis central bankers ’ speeches what makes you so optimistic about spain? unemployment is no longer going up ; the current account is in surplus. we see at least a bottoming out, a turnaround. you don ’ t mention greece? the eurogroup currently discusses whether there is a financing gap and whether a third programme is needed. obviously, it does not help to ask for debt restructuring. but at the same time we are far away from the size of the first two support programmes. some mention a single digit figure. it is important that greece reaches a primary surplus in the first quarter next year, on an annual basis. what do you make of the netherlands? it set a good example. it got into a difficult situation and reached a national consensus on how to get out of it while sticking to the european rules. i am not happy it got into the bad situation in the first place. but it is important that it did not follow the example of some bigger neighbours in 2003 and 2004. but it is set to miss the 3 % - threshold again in 2015? the rules allow for some flexibility. that is ok in a crisis. the ecb will take up supervision from next year and will review the books beforehand. do you already know exactly which bank will fall under your remit? no bank will be completely absent from our radar. the most important ones with assets of at least €30 billion will be supervised directly. we will also look at the size in relation to gdp, but we will cover at least three banks from each euro area country. the final list will only be made up when the new supervisory board takes up its duties next year. in the sample of banks subject to the comprehensive assessment we built in some safety margin of 10 %, because balance sheet totals can fluctuate. so, not all the banks that are assessed will necessarily end up being directly supervised by us. other banks will remain under national supervision. not with the amount of national discretion we see at present, but according to harmonized standards and rules. a dutch bank will be scrutinized