actions if the capital buffer is additionally anticyclical. such buffers “ breathe ” with the economic cycle. they are established in “ good ” times, ie times in which there is a risk of a credit bubble emerging. they consequently have a dampening effect on lending and ensure that banks have reserves in “ bad ” times. measures aimed only at individual business areas are also conceivable. for instance, capital backing for real estate loans could be raised in order to dampen lending. if capital requirements breathe with the cycle, they act in two ways : they strengthen the individual market player and they dampen cyclical fluctuations. the appropriate use of macroprudential measures is anything but easy, however. and this is where it really gets difficult. the measure must not only be suitable, it must also be the mildest possible. the choice of instrument must be suitable and the timing must be right – the measure must not be deployed too soon. the dosage must also be correct ; and there must be transparent triggers, for both when to deploy them and when to phase them out. some thought must therefore also be given to how long they should be in place. with anticyclical instruments, in particular, the phase - out period, ie when the dampening effect stops, can be just as important as the phase - in period, ie the dampening itself. however, another area is also vital to macro policy : the macroprudential toolkit still needs some work – at both the national and the international level, as the only measures currently available are those laid down in the crr and the crd iv ; and those deal exclusively with credit institutions. we lack instruments at the european level that target the behaviour of insurers or other market players. i will leave it at that, and now turn to the key players in macroprudential oversight. 5. responsibilities for macroprudential oversight as critical developments on financial markets know no national borders, macroprudential oversight and, in particular, any measures resolved, have to be harmonised internationally. comprehensive and close cooperation between various national and international forums is necessary for measures to have any kind of effect and for the playing field to be as level as possible. early warning systems that lack a mechanism to exchange information across borders or are not harmonised are pointless. “ state of play ” reports from countries facing critical developments can provide important information about potential vulnerabilities in other countries. however,

in other words between equity and efficiency. i have also argued that these two concepts are similar to the yin and yang in chinese philosophy : they are not mutually exclusive but complement each other. the debate is therefore ultimately not a question of “ either / or ” but of the right degree. solidarity and burden sharing are important values in european integration, especially in a crisis. but european integration is also about building a stable future – and this requires efficient structures. we thus have to strike a delicate balance between these two concepts. nevertheless, in the end, both sides of the debate are not that far away from each other. and most importantly, we all share the same objective : a stable monetary union. thus, to return to mark twain, let us stop carrying the cat by its tail and grab it by the neck instead. thank you. bis central bankers ’ speeches