of defence is required. the recent crisis has shown that a systemic crisis may quickly pose a threat to institutions that are actually sound. systemic risk, however, cannot be dealt with by microprudential supervision alone. regarding the establishment of an effective macroprudential toolset, important measures are still due. our major concern in this respect is the too - big - to - fail issue. efforts are being made by the fsb to present an approvable base solution to the g20 summit. essential details, however, will have to be finalised afterwards, in particular the formal definition of “ systemically important financial institutions ” ( sifi ’ s ). in order to find a credible solution to the too - big - to - fail problem strong political commitment would act as a helpful support. taking the time constraints into account, i want to conclude my remarks. nevertheless, i do not want to fail to mention that macroprudential surveillance has to go beyond the focus on individual national institutions. close cooperation at the european and international levels is indispensable in order to supplement microprudential supervision with a systemic view. the establishment of the esrb is an important step in the right direction. now the challenge for its members is to make it a success. thank you very much.

or starting with ifis, which would improve the range of high - rated instruments in local currency. from the viewpoint of ifis achieving this objective would be helped by adopting standardised bond documentation and international accounting rules, by lowering transaction costs ( not least through interlinked clearing and settlement systems ) and by developing domestic derivatives markets. 2. promoting domestic derivatives markets developing domestic derivatives markets is a crucial measure to promote liquidity both directly and indirectly through helping to diversify the investor base. derivative markets provide cost - effective ways for institutional investors to structure their portfolios more efficiently and improve their risk management. despite their dynamic growth over recent years, the emes ’ derivatives markets account for no more than 10 % of the total outstanding notional values in global derivatives markets. furthermore, the development of derivatives markets differs remarkably across regions. the trading volumes of exchange - traded and over - the - counter contracts are largest for foreign exchange forwards and swaps and for equity options and futures. trading of these instruments is particularly important in emerging asia, while exchange - based trading of interest derivatives on the whole is lagging somewhat behind and is more important in latin america. to promote the development of derivatives markets, the emes should examine the extent to which regulatory deficits and shortcomings in the market infrastructure may be impeding the evolution of such markets. the g7 countries could assist this process by providing their expertise and supporting technical assistance in this area in close cooperation with the ifis. 3. strengthening the market infrastructure and the legal framework a strong legal and regulatory framework, international competitive clearing and settlement systems, effective credit ratings, and good corporate governance are also key ingredients for the development and efficient functioning of capital markets. despite the remarkable progress that emes have made so far, further reform steps are needed in these areas. let me address these aspects in more detail. first, clearing and settlement systems : capital movements are global but the clearing and settlement of securities is very often country - based. the current setup in many emes in terms of mitigating risks in the settlement process and cost effectiveness is often less than optimal. in addition, clearing and settlement systems are still highly fragmented. however, best practices in this area are well developed in the form of recommendations by the committee on payment and settlement systems ( cpss ), the international organisation of securities commission ( iosco ) and the g 30 action plan towards enhancing the interoperability of settlement systems. thus, the challenge does not lie in determining what goals