play a major role in the esrb. however, wherever central banks are involved in financial supervision, it is imperative that this does not compromise their independence and their primary objective, which is to maintain price stability. 5. conclusion ladies and gentlemen there is no doubt that the regulatory and supervisory framework has to reflect the global nature of the financial system. nonetheless, heterogeneous national structures make it imperative to maintain a certain degree of flexibility when reforming regulation and supervision. to strike the balance between uniformity and subsidiarity is certainly a formidable challenge but i am confident that we will eventually succeed and create a more stable and more resilient financial system. thank you for your attention. bis central bankers ’ speeches

these topics in detail please let me emphasise how closely the subject of the new economy is linked to monetary policy. this applies not only to us monetary policy but also to the two pillar approach of the european central bank. regarding the first pillar - which is the reference value for money supply - the governing council of the ecb has pointed out that the trend growth of the economy could be enhanced by structural reforms on the labour and product markets. the european central bank would take such improvements into account in calculating the m3 reference value. at the same time, the second pillar of the monetary policy approach - that is the broadly based assessment of the outlook for price developments - would have to pay heed to traces of a new economy. however, it goes without saying that a conservative central banker cannot rely on hopes and expectations but only on reliable facts and established findings. to make it absolutely clear : my thoughts on some trace elements of a new economy in germany do not imply that i disregard the importance of the money supply for the medium - term price development in the euro area. schumpeter, the theory of economic development, ( 1911 ), transactions publishers, 1993, p. 223. schumpeter, loc. cit., p. 64. but now let me get back to the four topics i have just mentioned. with regard to the labour market and inflation it is initially striking that the development of inflation in germany over the last decade has been fairly similar to that in the united states. however, there was a certain time lag in germany. in the early 1990s, the german inflation rate was still around 5 % owing to tight capacity utilisation. since then it has fallen continuously. since 1995 the inflation rate has been well below 2 %. it is thus within a range that is consistent with price stability according to the ecb ’ s definition. in contrast to inflation, labour market trends in germany during the 1990s have been fundamentally different from those in the united states. whereas the us unemployment rate has continued to decline, the unemployment rate in germany has been rising significantly for a long time since the cyclical slump in 1992 - 93. and this has been accompanied by a continued decline in employment despite an active labour market policy and the creation of early retirement schemes. the german labour market is, if you like, a classic element of an “ old economy ”. it is only recently that the dent in growth caused by the asian crisis has been overcome, that an improvement can