##s must give consumers information about credit pricing at a time when the information is relevant, in language they can easily understand. the information must also be in a format that allows consumers to pick out and use the information that is most important to them. better credit disclosure facilitates better - informed credit decisions, and hence moreeffective competition among creditors. in a nutshell, effective disclosure empowers consumers and enhances competition. the federal reserve board has recently taken a new approach to increasing the effectiveness of disclosure - - namely, surveying and responding to consumers through consumer testing. having taught at a business school for many years, i am well aware of the types of consumer testing that firms have long employed : surveys, focus groups, and socalled “ mall intercepts, ” whereby shoppers are interviewed at random. systematically using such techniques to tailor the disclosure requirements set out in the regulations of the federal reserve and other financial regulators is, however, relatively novel. after extensive consumer testing, the board issued a proposal in may that reflects consumers ’ thoughts on clearer and easier - to - understand credit card disclosures. in particular, the proposed disclosures would highlight applicable rates and fees, especially penalties that might be imposed. the proposed rules would also require card issuers to provide forty - five days ’ advance notice of a rate increase or any other change in account terms so that consumers will not be surprised by unexpected charges and will have time to explore alternatives. recognizing the value of public input and our experiences in consumer testing, the board is now engaged in a similar review of the tila rules for mortgage loans. this process began last summer when the board convened four public hearings across the country to gather information on the adequacy of current mortgage disclosures, particularly disclosures for nontraditional and adjustable - rate products. as with credit card lending, the board is committed to conducting extensive consumer testing of proposed mortgage disclosures to identify what information consumers need, use, and retain when embarking on a search for a mortgage. the process of designing and testing disclosures is necessarily time intensive. however, it is a valuable investment, one that will ensure that we have a thorough review resulting in a substantive proposal that presents meaningful new disclosures. simultaneously, the federal reserve is undertaking other projects that can be implemented more quickly. for example, the board plans to respond to concerns about misleading or incomplete marketing practices in the mortgage market. by the end of the year, we will propose changes to tila rules

with bank supervision in the ncb and securities supervision in an independent standalone authority. insurance supervision is in many countries also located in a separate authority, but in other cases it is a department of the ministry of commerce or some other ministry. the second main stream is full unification of the supervision of banks, securities companies and insurance companies, all in one institution. the trend since some 15 years is that bank supervision in a number of countries has been moved outside the ncb and has been consolidated with the supervision over securities and insurance companies. however, the most common structure is still the traditional one 1. martin cihak and richard podpiera : imf working paper wp / 06 / 57 from 2006. but there are many variations. one is the combination of banking and securities supervision, which is logical due to the close relations between banking and securities activities. another is the combination of securities and insurance supervision with the aim to create a stronger authority with more resources and expertise. there are also some broader alternatives. the fsa in the uk performs supervision over a wide range of financial institutions, including brokers, pension funds and many more. its objectives also include financial sector consumer issues and even the promotion of london as a financial market place. all kinds of supervision and other activities related to the financial sector are placed under one roof. the netherlands, australia and others have followed an approach based on the purpose of the supervision. in these countries prudential supervision of banks and securities firms is conducted separately from the oversight of the conduct of the financial markets. the underlying rationale is that these activities are different. ensuring the safety and stability of banks and securities firms requires different regulations and skills from monitoring market conduct and taking enforcement actions. ireland, france, finland and others have retained bank supervision in an organisation closely related to the central bank but not in the central bank itself. in this way they benefit from the resources of the ncb and can make some cost savings, but avoid some of the arguments against locating supervision in the ncb itself. other countries, among them germany, have a stand - alone authority for financial regulation but the central bank maintains a role in the conduct of supervision by conducting most of the on - site inspections of banks. in this way the bundesbank benefits from its vast network of regional branch offices and its knowledge of the local economy. criteria for evaluating the organisation of supervision the choice of structure for supervision is not an end in itself but a means to achieve certain objectives. we should therefore