will be published and posted on the bank's website on 11 december. strengthening resiliency at the beginning of my remarks, i spoke briefly about the need to strengthen the resilience of our financial system. as i have already noted, in canada we have taken many of the correct steps, some beginning 20 years ago, as we worked to strengthen the supervisory system for individual financial institutions. the coordination among domestic agencies with an interest in the financial services sector is based on a long history of effective collaboration and on a common understanding of where mandates interact. yet there is still work to do so that we can be even better prepared the next time a crisis crashes onto our shores. history shows this is inevitable, given the difficulty investors have in going against the crowd and resisting the extremes of heady optimism in good times, and fear and even panic in bad times. we also have statutory responsibility for the oversight of risk containment measures in systemically important clearing and settlement systems. this infrastructure has continued to function very well throughout the global turmoil. given that inevitability, it is imperative that we address the weaknesses in the global financial system and in the regulatory and supervisory architecture that were exposed by the current crisis, if we are to increase the resiliency of the financial system to shocks and better support economic stability. the financial stability forum has examined lessons from the current crisis and made a number of recommendations earlier this year aimed at enhancing market and institutional resiliency. work continues under the guiding principles of the fsf, to encourage a financial system that : • operates with less leverage ; • is immune to the misaligned incentives that contributed to the current crisis ; and • has stronger oversight and greater transparency so that risks can be more readily identified and dealt with. collectively, we must find ways to improve the transparency of complex products traded in financial markets, so that investors are better able to assess the risks they take on. we must also examine how best to strengthen macroprudential regulation ( as opposed to institutioncentered microprudential regulation ) by : • bolstering controls on leverage ; • encouraging the buildup of adequate capital buffers in good times that can be drawn upon in bad times, thus dampening the credit cycle ; • developing mechanisms to provide liquidity to core financial markets so that they remain open ; and • expanding the amount of financial infrastructure that is properly risk - proofed, for example, custodial banks and clearing houses for credit default swaps ( cds

. the delors report of 1989 already highlighted that in a single market for financial services within a monetary union, a single monetary policy could make a positive contribution to financial market integration. 2 i consider the banking union to be an important and necessary extension of monetary union. it closes a vulnerable gap in the single currency by harmonising rules for the supervision and resolution of credit institutions at the european level and establishing european supervisory authorities. this is important, regardless of whether you wish to continue monetary union in the spirit of a “ maastricht 2. 0 ” with decentralised responsibility for fiscal policy or to develop it into a fiscal union with mutualisation of liability and control. in the eurosystem, the ecb provides banks with liquidity in its capacity as lender of last resort. supervision organised purely along national lines is no longer fitting with the times. liquidity assistance from national central banks can have an impact on the single monetary policy. the restructuring or resolution of financial institutions can overstretch the individual member states ’ financial means. the banking union does not mean an extension of joint fiscal liability, however – its aim is anything but that. rather, the banking union can play a role in establishing the liability principle at the european level in a better way than before. in future, private investors will have to shoulder losses. by contrast, public funding mechanisms may only be used in very tightly restricted exceptional cases, for example if the stability of the entire financial system is at risk. and if public funds have to be used, these should be national funds in the first instance. in this sense, the comprehensive assessment serves to ensure that apparent legacy risks do not fall within the scope of the new supervision and resolution regime. they should instead remain where they arose – at the national level and under national control. so is the banking union the solution to our problems? it could be an important part of the solution. but further steps are needed to make it a success. first, we must – as previously addressed – ensure that private investors are adequately liable for losses incurred. second, the banking union on its own is not the key to better separating the risks of banks and governments. we must also make further progress in regulation and put an end to the preferential treatment afforded to government debt instruments. third, earlier reforms of the financial markets in europe have focused on the banks. it should not be overlooked here that the integration of the markets for capital can make an important contribution to sharing opportunities and risks in