it is a sort of basic provision. besides, the quality of capital is very carefully monitored. is it immediately available to cover risks? or is there only a commitment that the capital would be available in the event of a crisis? supervisors closely scrutinise the risks posed by assets, loans and trading activities. the greater the risks of such deals, the more capital the bank must hold. a german government bond, for example, does not represent a risk when calculating the capital ratio, unlike securitised loans. so the average figure of 12 % is only indicative. so you take a close look at banks ’ books? yes. and in the end the capital ratio for one business segment may be much higher than the average. on average three times as much capital has been put aside for the trading activities of banks as in 2008. but we also need to strike the right balance between capital requirements and 1 / 3 bis central bankers'speeches risk. after all, banks should always be able to issue loans to businesses and consumers and to support the real economy, to assist with mergers and acquisitions, and to organise initial public offerings on the stock market. savings banks and credit unions are complaining about the costs of regulation and about supervisors going too far. generally speaking, the same risks must be subject to the same rules. nevertheless, a systemically important bank must today meet considerably more stringent requirements and is monitored much more closely than a savings bank or a credit union. the key point is that a major bank in difficulty is more likely to pose a threat to financial stability than a small bank, and if that is the case, distinctions are called for in some, but not all, rules. and after ten years, we should check whether the new rules are also having the intended effect. in the united states there are plans to relax the rules for banks. i don ’ t believe in returning now to deregulation or to purely national rules. that would be a big mistake. we need globally consistent rules for the activities of large banks, of banks which are important for the financial system. the crisis should have taught us that. banks are not only highly interconnected with each other but also with financial markets, and only global rules can protect us from chain reactions and regulatory arbitrage, i. e. exploiting differences in regulatory standards. there is now a european resolution authority for ailing banks, but recently it didn ’ t intervene in several credit institutions in italy. again, the

. there are, for instance, many young families who can build their own home because interest rates are very low. an expansionary monetary policy helps in the medium and long term, also because, as a result of growth, jobs are created, which in turn generate income. only that makes it possible for people to buy property or to save or invest. you approach monetary policy as a member of the ecb ’ s executive board and governing council. when will the ecb start to unwind its monetary policy? the expansionary monetary policy has both advantages and side effects. as time passes, the positive effects get weaker and the risks increase. so it ’ s important to prepare for the exit in good time. what ’ s crucial in that context is a stable trend in the rate of inflation towards our objective of just under 2 %. it ’ s not quite there yet. still, we need to address the issue : how should the return to normal monetary policy be arranged? what will be the time frame, what will be the tools and what will be the sequence? what steps are to be taken and when should we start to wind down the bond purchases? that ’ s likely to be a long process. that ’ s why we on the ecb ’ s governing council should now answer the questions i just asked. 1 a mittelstandsbank serves small and medium - sized enterprises. 3 / 3 bis central bankers'speeches