and as such, regulatory arbitrage must not become an option. * * * let me conclude. credibility for central bankers now rests on admitting that monetary policy and macroprudential policy are somewhat porous, especially in a situation where we could have an upward financial cycle associated with weak inflation. this calls for a consistent action by central banks that covers both areas : price and financial stability. moving away from an overly strict separation principle, let us try to be complete and consistent central bankers playing an active role in monetary policy as well as in macroprudential policies. 1 altavilla c., boucinha m., peydro jl, 2017, monetary policy and bank profitability in a low interest rate environment, ecb working paper series # 2105, october 2017. 2 ratio of non - financial agents ’ debt to gdp, first quarter 2017. source : eurostat, federal reserve, banque de france calculations. 3 “ the future of finance and the outlook for regulation ”, remarks by vitor constancio, vice - president of the ecb, at the financial regulatory outlook conference organised by the centre for international governance innovation and oliver wyman, rome, 9 november 2017. 4 / 4 bis central bankers'speeches

at the euro area level, by adjusting it to national specificities and addressing idiosyncratic financial stability risks while maintaining the harmonious transmission of monetary policy across the euro area. second, macroprudential policy may help to fine tune the overall impact of monetary policy by ensuring that the risk - taking channel is not disproportionate in some specific sectors / countries, in order to prevent systemic risk. let me give you two examples of what we monitor very closely in france : the increase in commercial real estate prices in paris, and the rise in corporate debt. having said this, i do not mean that there is no hierarchy between the two objectives. i call for strong complementarity, not for a merging of objectives. to be more explicit, i consider that a monetary policy strategy that targeted asset prices would be a mistake. as central bankers, we need to avoid confusing economic agents ; our role is to anchor expectations and ensure business continuity. 4. – there are still challenges to be addressed to provide authorities with the necessary policy toolbox for financial stability for it to be more effective, we still face a number of challenges in order to achieve an optimal macroprudential regulatory framework. first, we have to complete the regulatory framework for banks, by finalising the basel iii reform : i strongly wish and hope that we can reach a fair and 3 / 4 bis central bankers'speeches reasonable agreement soon. a revision of the european macroprudential framework is currently underway at the european commission level. moreover, decisive progress should be made to better provide macroprudential authorities with policy tools properly designed to address financial risks beyond banking. market financing, shadow banking, fintechs, pension funds, financial innovations are all part of the scope of macroprudential policy, insofar as they have the potential to pose a financial risk to our economies. our next issue is less the solvency of banks than the liquidity of non - banks. it is also our duty to complete the european regulatory framework with the finalisation of the resolution mechanism to make the functioning of the banking sector smoother – in line with the spirit of the banking union, also enabling the capital market union ( cmu ) to bloom, within the holistic approach of the “ financing union for investment and innovation ” i have suggested. finally, we must ensure that the new regulatory framework is consistently implemented everywhere, and avoid any backtracking outside europe. financial stability is a global common good,