requirements for national schemes, the current level of harmonisation is low, with different levels of protection and different structures in place across the eu. this is not only inefficient but may hinder further integration. as many of you will already be aware, the european commission is currently undertaking a wide - ranging review of deposit insurance arrangements, and i would encourage it to be ambitious in this respect. the second relates to the work being carried out by the commission with the aim of ensuring that eu financial services legislation and supervisory practices do not pose barriers to cross - border mergers and acquisitions. consolidation processes should be market - driven phenomena that respond to market needs, such as economies of scale, it synergies, the benefits of diversification, access to a larger client base, etc. i think that supervisors do have a crucial but limited role to play in fulfilling their responsibility to ensure that banks are not taken over by shareholders that are not suitable on prudential grounds. but this is as far as we should go. the supervisory framework let me now turn to the supervisory framework. i believe that we need to think in terms of a european system of banking supervision. i am not talking about a single european supervisory authority. i don ’ t think the time has come for this, either at a conceptual or practical level. but rather, i think that we need to develop the existing institutional system for european banking supervision in order to ensure that all of the possibilities for co - operation and convergence are fully taken advantage of. the main policy objective at this stage should be to enhance cross - border supervisory co - operation in order for supervisory action to be perceived as unified. this system should be built on four levels. at the first level, we have the competent supervisor of each banking institution ( whether this is the home or host supervisor in the context of the group ), which will have to fulfil its responsibilities and accountabilities, on the basis of the powers and obligations it has been given by the national parliament and legislators. the second level consists of bilateral co - operation between the supervisors of internationally active institutions. this has long been the bedrock of effective supervision in the context of increasing internationalisation, and will continue to be essential in the future. multilateral co - operation forms the basis of the third level. this is an aspect that has become progressively more significant in recent times, and which will grow in importance in the coming years. both bilateral and multilateral arrangements will be increasingly necessary in

requirements needed to address this challenge. nor should we forget that central banks are also important investors in the debt markets, both in the area of monetary policy and reserve management. although we have not yet included environmental risk assessment in our credit analysis, we are working to remedy this. esg - environmental, social and governance. 8 / 9 in the framework of the eurosystem, an in - depth review of risk assessment processes is under way, aiming to ensure that all relevant factors – such as environmental ones – are taken into account for prudent central bank portfolio management. consideration and application of these criteria is without doubt a new development, and also for central banks. in september, for instance, the banco de espana made its first green investment, participating in a fund launched by the bank for international settlements ( bis ) that invests entirely in green bonds. with this type of initiative the banco de espana aims to include environmental sustainability goals in its reserve management. this is consistent with its membership of the ngfs, which less than two weeks ago published a sustainable and responsible investment guide for central banks ’ portfolio management. conclusions i wish to conclude by emphasising, once more, how important it is that the financial sector contribute to the collective effort that meeting the goals set in the paris agreement represents. the decarbonisation goals set by the commission for 2050 pose a major challenge. 2050 may seem a long way off, but if we wish to meet these goals it is clear that the public at large, firms, banks, governments and public authorities will all have to start addressing the challenge today, with a sufficiently ambitious but also realistic approach. the path ahead, to incorporate environmental risk into internal control and management, is a considerable one and we, as supervisors, also have much work before us. yet we set out on this path only very recently and i must say that the progress made has been surprisingly fast. for all our sakes, we trust that we will be up to the challenge. thank you. 9 / 9