response to these developments, the international community adopted in 2009, under the impetus of the g20, an ambitious reform programme including basel iii, which is a key element for the banking sector. indeed, a banking system that is more robust as a whole and capable of absorbing major shocks is vital to avoid the repetition of such chain reactions in the future. in this respect, despite the delay in the reform agenda in the united states, europe must clearly press forward : the credibility of our banks and our economies is at stake. basel iii is naturally based on basel ii which establishes the current capital adequacy rules. however, basel iii goes further than merely changing and updating the existing rules. – basel iii indeed considerably strengthens the capital requirements that banks must meet, but this reform is more extensive in that it significantly enhances the prudential framework : in addition to capital requirements, it establishes liquidity requirements, and a leverage ratio is set to be introduced in the medium term. from this point of view, basel iii is a far - reaching reform of banking regulation. bis central bankers ’ speeches – furthermore, and most importantly, i believe that basel iii is a major step forward in that it leads to a much closer interaction than has been the case to date between the individual supervision of banks, known as microprudential supervision, and the overall supervision of the banking and financial system, or macroprudential supervision. this broader view of banking supervision, taking account of all its facets, translates into a number of provisions and notably introduces additional capital buffers ( a capital conservation buffer, a countercyclical buffer and a buffer for systemically important financial institutions ) in excess of the regulatory minimum. basel iii therefore represents a quantitative and also a qualitative leap. given the magnitude of the changes to be made, basel iii has major repercussions on market participants, who must adapt to this new environment. these repercussions are both anticipated and desirable, but the potentially negative consequences of this reform must be kept to a minimum. in this respect, many associated risks were highlighted during its drafting and even more so recently, due to the current economic and financial difficulties. these included the risk of a rise in the cost of credit or of a credit crunch. hence, the impact and stakes of basel iii must be carefully analysed and addressed. 2. the difficult economic environment stresses the importance of implementing basel iii in an appropriate manner but does not call into question

new rules. * * * before handing the floor to daniele nouy, secretary general of the autorite de controle prudentiel, i would like to conclude with a few words on recent developments in europe. you are aware of my commitment to full harmonisation in europe : this “ single rule book ” is the only way to achieve a truly efficient single market. you are also aware that the negotiations between the european council and parliament might reintroduce the national options that the commission had removed. they may also, under a compromise text, render partly redundant and ineffective the responsibilities of supervisors of home and host countries, as well as those of micro - prudential and macro - prudential supervisors. in this context, i believe that the creation of a banking union is to be supported. it would be a major development for banking supervision in europe, which would bring numerous benefits and would enable us to efficiently address the current difficulties. such a development would most likely have very positive consequences in that it would be a step towards greater european harmonisation. naturally, the benefits of such a reform would be more far - reaching but such questions go beyond the scope of today ’ s conference. questions regarding the impact and stakes of basel iii will already give ample food for thought in the rich debates and discussions this morning. i wish you all a fruitful conference. bis central bankers ’ speeches