management, strong supervision and robust liquidity cushions are also critical. the basel committee ’ s work agenda seeks to strengthen practice in these areas. it is in the process of finalising global sound practice standards for liquidity risk management and supervision. these will address many of the lessons learned from the market turmoil. the committee will also work on stress testing, off - balance sheet management, and valuation practices. furthermore it is enhancing market discipline through better disclosure. ensuring effective and efficient cross - border banking supervision let me now turn to two challenges related to the infrastructure of supervision in europe, namely cross - border supervision and the interplay between central banks and supervisors. the former challenge follows from the internationalisation of the banking industry. over the past decades, european banking groups have become increasingly international in character. not only do they move more easily across national boundaries, they also organise themselves accordingly. prompted by these developments, supervision has moved beyond its primarily national orientation. indeed, supervisory rules and regulations are being progressively internationally harmonised – basel ii is in this respect a leading example. nonetheless, internationally active banks are still confronted with a multitude of supervisors and regulators, which may impose their own specific national requirements. as the internationalisation of banks may be presumed to continue in the foreseeable future, further steps are needed to ensure effective and efficient cross - border banking supervision in europe. while a more integrated pan - european supervisory structure is ultimately desirable, how to get there is far from clear. indeed, legal frameworks, deposit guarantee schemes, fiscal regimes and national supervisory arrangements within the european union are still very diverse. the european council agreed in december 2007 on a financial supervision roadmap. important elements of this roadmap are the introduction of a european dimension into the mandates of national supervisors and the improvement of the functioning of eu colleges of supervisors. realistically, to promote more effective and efficient banking supervision in europe in the near term, we should continue to build on the existing institutional structure. accordingly, the challenge of cross - border banking supervision can be addressed in a two - step process. the first step is straightforward and can be taken swiftly. in line with the outcome of the latest informal ecofin and the recommendations by the financial stability forum, so - called colleges of supervisors should be established for all major cross - border groups. these international colleges should include all relevant supervisors and would be created to enhance cooperation on ongoing supervisory issues. existing supervisory committees such as cebs should guard the coherence and consistency between the

##uba, the imf stressed synergies with the bank ’ s other tasks. i agree. as i already indicated, at the nederlandsche bank we see important advantages of having various activities under one roof, and i am convinced that this new task will further strengthen the central bank of aruba ’ s position as the guardian of financial stability. ladies and gentlemen, let me conclude. because of the rapid changes in the international financial landscape, central banks need to be flexible, indeed more flexible than in the past. by considering financial stability as their main responsibility, central banks should be able to take up new tasks. both the central bank of aruba and the nederlandsche bank have proven to be flexible organisations. as small, open economies, aruba and the netherlands are more vulnerable to external shocks and therefore have a particular interest in maintaining financial stability at a global level. given this common interest, i am sure that the relationship and kinship between our central banks will remain as close as it has been in the past 16 years.