in government. let me make it clear : what matters for us is not the sheer number of regulations but their quality. after all, the purpose of regulations is to create a consistent and reliable regulatory framework that sets the right incentive for market players to behave in a risk - conscious manner. the regulatory reforms initiated by the g20 are therefore also aimed at reasserting market economy principles – such as the unity of liability and control in particular. ultimately, functioning financial markets are indispensable for our general economic wellbeing, since they ensure the efficient allocation of risks and capital. bis central bankers ’ speeches 3. cross - linkages and connections the close interlinkages within the international financial system mean that sector - specific regulations can also impact on other sectors and market players. the individual elements of the regulatory agenda therefore not only have to build up stage by stage, one on top of the other ; they also have to be interlocked. for example, close links exist between the banking and insurance sectors, not least because insurers invest in bank bonds on a significant scale. regulation of one sector therefore always has implications for the other. for that reason, any interactions between the solvency regime for insurers and bank regulation have to be borne in mind if we are pursuing a coherent regulatory agenda. the regulatory framework for systemically important financial institutions, known as sifis, provides us with an example of the cross - sector applicability of regulatory provisions. this framework was developed under the aegis of the fsb and was adopted by the g20 in november 2011. its objective is to contain the systemic risks emanating from sifis. to this end, the framework rests on two pillars : the first of these comprises better loss - absorbing capacity in comparison with other institutions. this is achieved by capital surcharges going beyond basel iii set according to the systemic importance of the given institution. the second pillar consists of mechanisms allowing the restructuring and resolution of sifis without plunging the financial markets into turbulence. the example of the recently nationalised sns reaal in the netherlands shows the importance of putting in place regulations in this sector. the sifi framework was initially applied to globally systemically important banks. in a second stage, it was extended to banks which are systemically important at the domestic level. finally, intensive work is being performed at present on transferring it to insurers and financial market infrastructures which are systemically important globally. in terms

, r. ( 2016 ) “ the rise and fall of american growth : the u. s. standard of living since the civil war ”, princeton university press. 5 constancio, v., ( 2016 ), “ the challenge of low real interest rates for monetary policy ”, lecture by vitor constancio, vice - president of the ecb, macroeconomics symposium at utrecht school of economics, 15 june 2016. 6 inflation as a global phenomenon has been documented e. g. by m. ciccarelli and b. mojon ( 2010 ), “ global inflation ”, the review of economics and statistics, 92 : 524 - 535, although there is less evidence of the phenomenon in developing countries : parker, m ( 2016 ) “ global inflation : the role of food, housing and energy prices ”, rbnz discussion paper 2016 / 05. measures of global economic slack are good predictors of national inflation in advanced countries, as shown empirically e. g. by c. borio and a. filardo ( 2007 ), “ globalisation and inflation : new cross - country evidence on the global determinants of domestic inflation ” bis wp no. 227 ; and in new keynesian open economy models e. g. by r. clarida, j. gali, and m. gertler, ( 2002 ) “ a simple framework for international monetary policy analysis, ” journal of monetary economics 49 : 879 – 904. 7 imf ( 2013 ), “ the dog that didn ’ t bark : has inflation been muzzled or was it sleeping? ”, world economic outlook, april. 8 mersch, y. ( 2016 ) “ bares bleibt wahres ”, spiegel online. 7 / 7 bis central bankers'speeches