financial and economic history. therefore, one might be tempted to classify 2012 as an “ annus horribilis ”. i wish to challenge this view. will 2012, with hindsight, possibly go down in history as an “ annus mirabilis ”? absurd, you may think. but on second thought this notion seems less absurd than it first appears. let us not forget that the famous poem of john dryden entitled “ annus mirabilis ” was inspired from major events in the year 1666. a very difficult year, to put it mildly, a year in which the great fire destroyed 80 % of the city of london. the fire spread so rapidly due to the city ’ s narrow streets and the “ interconnectedness ” of houses. the battle to stop the fire was considered to have been won by two factors : the strong east winds died down, and the tower of london garrison used gunpowder to create effective firebreaks to stop the fire from spreading further eastwards. dryden ’ s view was that god had performed miracles for england. the king promised to improve the streets. bis central bankers ’ speeches well, some may say, so it is in 2012. the fire in the financial markets was stopped by the ecb, by the two firewalls efsf and esm as well as by the governments announcing that they would improve the financial system. thus 2012 is an “ annus mirabilis ”. but as you know, miracles need to be acknowledged either by the pope or by the scientific community. so let us check whether a miracle was at work in 1666. and what i am going to say now about 1666 can be understood as a metaphorical warning about what could happen if we do not draw the right policy conclusion from the events of 2012. despite numerous radical proposals, london was rebuilt using essentially the same street plan which was in use before the fire. so the miracle is that nothing similar to the great fire has happened in the following years. the lesson of this story is quite clear. the financial system needs better rules than in the years preceding the crisis. we need a resilient financial system. we need a strong supervision. we need effective macroprudential instruments. we need to know how these instruments will work, which is a challenge for the scientific community as well as for macroprudential policy makers. otherwise, we would be putting our trust in a miracle. and we need to understand the complicated interactions between the financial and the real economy

. at the initiative of politicians ( financial services committee, fsc ), work is now under way on establishing mediation within cebs as well. transferring a procedure that was designed for securities trading raises a number of questions. unlike in the securities sector, in the banking field mediation does not have a legal foundation. although mediation is voluntary, and its results legally non - binding, considerable “ moral ” pressure to abide by the results is likely to be created. moreover, it is not just specific “ cases ” or “ products ” which are at issue in cebs to become subject to mediation but large sections of supervision. it must also be noted on 27 march, econ will probably adopt a report on the commission white paper on financial services policy 2005 - 2010, which advocates, in surprisingly clear language, a centralised supervisor. in paragraph 34, econ “ [ n ] otes that for a real oversight of the systemic and prudential risks of the top players in the market, the present system of cooperation is too weak, and promotes a well - equipped executive european prudential supervisory authority inside that system endowed with the appropriate competences for supervision of large cross - border and cross - sector financial conglomerates ”. that the competencies of the potential mediation parties differ in the field of banking, depending on whether they are home or host supervisors. at the same time, the question of need for a mediation also arises in some areas. thus, for instance, it is an option for approving group - wide risk - measurement procedures pursuant to article 129 ( 2 ) of the crd. however, cebs has already developed “ guidelines on validation ” with the aim of reaching a common decision within the six - month period. seen in that light, the use of meditation might be criticised as an example of excessive bureaucracy. mediation cannot – and must not be allowed to – undermine the european or national legal framework. although areas such as “ legal proceedings ” and “ national legislation ” are not being envisaged as objects of mediation, the possibility of subjecting national discretion – and, thus, national legislation – to mediation has not been clearly ruled out, either. conclusion : careful thought should be given to the areas to which such a procedure is to be applied. although mediation may help, it could also cause harm if the legal framework were abandoned entirely or interpreted too broadly. mediation is not a new “ lamfalussy procedure ” for adopting legislation but merely a tool for resolving disputes within