stage the risks arising from the interplay of financial market actors and potential contagion effects and take countermeasures. this holds both for systemic risk caused by interdependencies within the financial system and for risk concentrations arising from interplay between the financial system and the real economy. at the same time, the goal of macroprudential oversight is the early identification of the build - up of financial imbalances so that countermeasures can be taken. with regard to giving supervision a more macroprudential focus, several key institutional decisions have already been taken at international and national level alike. central banks are usually key players in macroprudential oversight. this makes perfect sense since central banks house a greater concentration of the expertise needed for a systemic perspective than other institutions. they therefore have comparative advantages in terms of information and ability to take action, born, for instance, of central banks ’ involvement in the responsibility for financial stability, their oversight of payment systems, their monetary policy operations, which bring them in close proximity to the markets, and their involvement in many international bodies and committees. at this juncture, i wish to confine myself to three examples of institutional reforms already being undertaken ; central banks are key players in all of these cases. as an example of international efforts, the fsb and the international monetary fund ( imf ) have, since 2009, been conducting global early warning exercises twice a year together with central banks. in these exercises, endogenous financial risks and macrofinancial systemic risks are analysed and policymakers are given confidential warnings and recommendations for actions to counteract identified weaknesses. in the eu, a decisive step with a similar objective has been taken in the form of the recent agreement on the establishment of the european systemic risk board ( esrb ). the esrb and its support structure, based at the european central bank, will assume responsibility for macroprudential oversight in the eu beginning in the year 2011. its objective is to ensure the early detection of stability risks and issue risk warnings or recommendations to the european union, member states or european or national supervisory authorities. finally, here in germany, the so - called risk committee composed of high - ranking delegates from the bundesbank and bafin has been established at the end of 2009. it serves as a coordination committee for better integration of microprudential supervision and macroprudential monitoring. at its regular meetings, information on relevant risk areas is exchanged, enabling

andreas dombret : beyond the financial crisis – dealing with systemic risk dinner speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the workshop “ beyond the financial crisis : systemic risk, spillovers and regulation ”, organised by the deutsche bundesbank and technische universitat dresden, dresden, 28 october 2010. * 1. * * strengthening resilience ladies and gentlemen, i warmly welcome you to this dinner on the occasion of the workshop, jointly organised by the technische universitat dresden and the deutsche bundesbank. this has been a busy day full of research results and models. i would now like to complement this view with some remarks focusing on the policy dimension of systemic risk. over the last months, the international community has already decided to improve the regulatory and supervisory framework for the international financial system in several key points. the recent agreement on tighter capital standards ( basel iii ) represents a particularly decisive step forward in the envisaged re - form agenda. the new rules will probably be finally ratified at the forthcoming g20 summit of heads of state and government in seoul. bank capital will have to be stronger and higher in future, which will reduce the likelihood of individual institutions failing. larger risk buffers in the form of additional capital are not enough, however. more attention needs also to be paid to the “ big picture ”, the system as a whole. if the crisis has taught us one serious lesson, it is that the tightly networked international financial system can cause events which start out as isolated shocks to rapidly go global and unleash systemic effects. such systemic risks can originate in any part of the financial system : channels of potential contagion exist both within financial sectors and markets and across sectors and components. feedback loops between the financial sector and the real economy can also give rise to systemic risk. the system as a whole can also encounter difficulties if, owing to interdependencies, the rational conduct of market participants at the individual level were to lead to market dislocations in the aggregate. i draw three direct conclusions from the foregoing, which are related to one another and should be main elements of the policy response to the crisis. first, we need to find a suitable way of dealing with systemically important institutions. second, the traditional microprudential supervision needs to be supplemented with a macroprudential – or systemically oriented – component. third, we must