think that principles applied on a standalone basis can eliminate the need for rules. further, the rules - based system does not prevent the industry actors from the resort to interpretation and judgment. i believe that in a financial environment characterized by a fast innovation process, the regulator could grant sufficient time for the industry to develop robust practices and principles. if such principles turn out to be persistent and shared by all the actors of the industry, the regulator could adopt them as benchmark rules. however, in the absence of convergence of such market - based principles, the regulator might lay down guiding principles in order to provide incentives rather than imposing prescriptive and detailed rules but at this stage we need to develop a strategic view on how progress can be made on a cross - border level to reconcile market actors ’ and regulators ’ objectives. as you know, full harmonisation would neither be feasible nor desirable in light of substantial differences in the legal settings even inside the european union countries. however, a variety of regulatory instruments may be employed, ranging from fully market - based solutions to monitored selfregulation, principles - based public regulation and detailed legal rules. in order to identify the appropriate tools, the problem must be approached with due regard on the potential negative impact that regulatory and supervisory inefficiencies can have on global risk management and liquidity management practices as well as business structures. these issues need further consideration. again further cooperation between supervisors, policy makers and industry actors is desirable for the task of defining legal standards. the success of such a process depends mainly on making the best possible effort to ensure consistency and reduce complexity in practice. thank you for your attention.

practices. however, their application on the national level may be completed with more specific rules in the course of time. 5. a last angle of view is what method is most conducive to cross - border activities. in recent years a wide range of financial innovations and a growing interdependence among financial institutions have drastically modified the international financial landscape. this will require an open and transparent discussion among the industry and regulators on the international level. in europe, the lamfalussy framework, based on the concept of comitology, fosters the important issue of cooperation among relevant authorities and actors. the success of the lamfalussy process in the securities field prompted eu authorities and member states to propose its extension to, inter alia, the field of banking regulation and supervision. this process should lead to a more flexible regulatory process and more consistent implementation of legislations and rules in member states. the success of current efforts to develop consistent cross - border banking supervision depends partly on an active and effective role of the industry actors. on the one hand, supervisory authorities have to deepen their understanding of the international dimensions of regulatory practices and make adjustments to national approaches in order to enhance supervisory convergence. a reinforced cooperation between national regulators is necessary in this process. on the other hand, suggestions and commitments of market participants regarding risk management principles are necessary for the soundness of the financial system. thus the cebs ( committee of european banking supervisors ) is conducting public consultation with relevant actors before submitting advice to the commission or publishing standards, guidelines and recommendations. this work has significantly contributed to build the foundations of the eu supervisory convergence which should be able to promote further banking integration and maintain at the same time its effectiveness in pursuing financial stability in a more integrated financial system. furthermore, the discussion held under the initiative of the basel committee on banking supervision has led to several important international agreements, which have been taken to improve capital adequacy, supervisory framework and market discipline. the implementation of these international standards should strengthen banks ’ capital worldwide and improve systemic stability. we in europe, remain notably in favor of the multilateral approach. we would hope that international principles elaborated in international fora will also be timely implemented by all those involved in these agreements, unless a purely bilateral approach is considered superior. 6. to conclude, i would like to underline that effective rules and efficient principles, in my view, are both essential to promote financial integration and reinforce financial stability. it is delusory to