is still underway and the financial stability board is expected to provide recommendations to the g20 summit of november in seoul, the european council has recently agreed that eu member states should introduce systems of levies and taxes on financial institutions to ensure fair burden - sharing and to set incentives to contain systemic risk. as regards these initiatives, i would like to underline that the ecb has always been supportive of exploring the feasibility of such measures. however, for such measures to have the desired effect, it is important that an internationally coordinated solution is ensured. i am also of the view that any contribution by financial institutions should be complementary and coherent with supervisory and regulatory regimes. sequencing of the implementation of measures is thus of utmost importance. finally, it is important that the higher overall cost of funding is not passed on to the customers, for instance in the form of higher lending rates / fees or lower remuneration on deposits. another important area of regulatory reform is the efforts underway to achieve a single set of high - quality global and independent accounting standards by june 2011. in order to have a sound regulatory framework having high - quality and convergent accounting standards is crucial. we have to ensure that the current gap between the ifrs and us gaap narrow rather than widen. it seems that the current fasb proposals on classification and measurement of financial instruments would result in more financial instruments to be measured at fair value, leading to an overall expansion of fair value accounting. accepting this would not address some of the key lessons from the financial crisis, namely that fair value accounting does not always provide decision - useful information and it may exacerbate pro - cyclical effects. in addition, an expansion of fair value accounting would be in direct contradiction to the “ mixed measurement model ” as endorsed by the iasb, and therefore represent a major setback on achieving accounting convergence. supervisory reform let me turn to briefly touch on the progress with the supervisory reform. if there is one uncontested lesson from the crisis it is the need to further develop the capacity of the authorities to conduct macroprudential supervision. the ultimate aim of macro - prudential policies is to contain the build up of financial vulnerabilities and ensure that the financial system is able to withstand their unwinding, minimising potential spill - overs to the real economy. an effective macro - prudential framework aims at delivering a thorough analysis of systemic risks, as well as the formulation of appropriate policies to address such risks identifying, in

all of this should contribute to making public finances in the euro area credibly robust. the ecb welcomes this outcome. as regards the euro area crisis management instruments, we welcome the decisions of the heads of state or government of the euro area to strengthen the efsf and the esm in a number of areas. first, there is now greater flexibility in the euro area crisis mechanisms to act as backstops, thanks to the decision to accelerate the entry into force of the european stability mechanism, esm, to july 2012 and for the european financial stability facility, efsf, to remain active in financing programmes that have started until mid - 2013. second, the clarification that as regards private sector involvement, the euro area will adhere to established imf practice is also helpful in reassuring investors. third, the decision to include an emergency procedure into the voting rules of the esm1 is essential for effective decision making procedure, especially in crisis situations. as regards the efsf, the governing council of the ecb has decided that the ecb will be able to act as agent for the efsf in its market operations. the ecb – probably supported by a number of national central banks – will make its technical infrastructure and know - how available to the efsf. the technical and legal preparations have started and we hope to complete them in january. iii. credit rating agencies the activities of credit rating agencies, notably in relation to sovereigns as well as the efsf, have lately occupied centre stage in the debate in europe. calls for better regulation have become louder. against this background, the commission ’ s recent legislative proposals on credit rating agencies, which the ecb broadly supports, is also discussed by this committee. credit ratings have a direct impact on the market functioning and the wider economy. a sound and robust framework must thus be created. this framework should be geared towards the following objectives : to reduce market volatility ; to enhance the quality of rating process ; and to restore market confidence. the two issues that are of particular importance are, first, the assurance of appropriate underlying methodologies and the transparency of ratings ; and second, the reduction of hardwiring of ratings in legislation and market practices. ratings simplify complex risk assessments. but they should only be one of several inputs for investors. in particular, they should be no substitute for financial institutions and other investors to carry out their own assessment. this is the main step towards avoiding mechanistic