those who are responsible for the design and implementation of the processes. i think these principles set out clearly what supervisory expectations are, and should provide a useful steer to the industry. our work on validation will accelerate over the coming months, although our focus will be more on sharing and cataloguing information and approaches, and not on trying to develop a prescriptive method. as we have stated in our principles, the primary responsibility for validation lies with the banks themselves. close dialogue with the industry in our work will, of course, be of great importance. in turning to my conclusions, i would like to use this opportunity to make a brief comment from my perspective as governor of the banco de espana. although i have talked about the work underway in the aig on implementation, you are probably also aware of similar work being conducted in europe, by the committee of european banking supervisors, which is seeking to promote consistency and convergence in the application of basel ii in the eu. as i have said on other occasions, i believe that basel ii represents a great opportunity for the eu – as a single market - to lead the way on international convergence, and i hope that we can seize this opportunity. certainly, the progress made by cebs so far is encouraging in this respect. conclusion coming back to the points i made earlier, even considering the ongoing work on trading activities under basel ii, i believe that the vast majority of efforts being undertaken by banks and supervisors alike today related to basel ii are focused on implementing the very good rules that have already been developed. i believe that this should be the committee ’ s main focus for the near term. it is important as well to remember that basel ii is not meant to be an exercise in compliance. its goals are to improve the quality of risk management across the banking sector ; to strengthen the resilience of the financial system ; and to promote more sustainable economic growth for the good of both consumers and businesses alike. i look forward to continuing to work with you as we all enhance our efforts to make those goals a reality.

##os : market overview and financial stability issues, ” workstream on securities lending and repos, interim report of the shadow banking workstream 5, 15 march 2012. bis central bankers ’ speeches one of the specific measures under consideration is the increased use of central counterparties. another promising avenue addresses the regulation of margins to mitigate the problems associated with procyclicality. adopting minimal, or countercyclical, margins could help to curb excessive leveraging during periods of exuberance and lessen the extent of a disruptive curtailment of leveraging during difficult periods. moreover, increased use of central counterparties for repos could facilitate the implementation of this type of regulation. conclusion it was my intention today to talk about risks, but even more to shed some light on the significant strides taken in canada to improve the resilience of our financial system. one tangible, and local, example of this progress has been the creation, right here in montreal, of a central counterparty for repo transactions. transactions executed by this counterparty are completely transparent and well capitalized, and there are rules and procedures in place in the event of default. today, canada ’ s experience is benefiting other countries and authorities. however, it ’ s worth emphasizing that it was the willingness of the private and public sectors to work together that led to the creation of this counterparty. it is essential that this spirit of co - operation be maintained, because much remains to be done. the success of this counterparty depends on the subsequent phases of implementation, which will broaden its sphere of influence. we will never have a risk - free financial system. that ’ s why we need to take measures to render it more resilient to shocks that may occur, either from abroad or domestically. let us make the financial system stronger to build a more stable future. thank you for your attention. bis central bankers ’ speeches