sector are held by institutions for which we lack a detailed statistical breakdown. such data gaps are a cause of concern to economists in particular, but they should raise concerns among all policymakers. we need more data to bring this sector out of the shadows. we need more data to examine and understand it more thoroughly. otherwise, we might overlook risks that could threaten the financial system. a banking supervisor ’ s perspective but let ’ s now turn away from shadow banks and towards regular banks. as i just said, maintaining financial stability is about two things. first, it is about preventing the build - up of bubbles ; second, it is about making the system more resilient. supervising individual banks helps boost resilience. indeed, for a long time, microprudential supervision was the only policy field with a specific financial stability goal. but this has changed a lot. so, let ’ s take a closer look at how banking supervision today helps to ensure financial stability. ecb banking supervision directly supervises the 118 biggest banking groups in the euro area – with over €20 trillion euros in total assets. clearly, these banks – some in their own right, some 7 / 10 bis central bankers'speeches as part of a group – are systemically relevant. given their huge role in financing the euro area economy, their resilience is key to financial stability. the first step is for the supervisor to obtain a holistic view of each of these banks, not only assessing capital and liquidity risks, but also their internal controls and governance. and then the supervisor needs to act and push for improvements in all these elements if needed. but it is not enough to look at each bank in isolation. to identify and understand new risks and vulnerabilities, the second step is to take a broader view. as supervisors we have to stay closely attuned to the macroeconomic environment in which banks operate. on the one hand, we take into account macroeconomic assessments drawn up by other european authorities and national supervisors. on the other hand, we also take into account how each bank performs compared to its peers. and thanks to our european perspective, we can compare banks across the entire euro area. this broad view is indeed one of the great advantages of european banking supervision. among other things, we have benefitted from it when looking at non - performing loans, interest rates risk in the banking book, leverage finance and business models in general. all this shapes our thinking and helps us to focus

they need to. in making such a request, they should, however, be mindful of the reporting burden on banks. they need to strike a balance and weigh up the burden on banks against the risks that may arise. last but not least, harmonised rules are essential tools for european supervisors. if we are to ensure equal treatment for all banks within the banking union, we must be able to apply the same rules. and to do their jobs well, even the most competent supervisors need appropriate budgets. this is at times forgotten, but it is crucial. and i would like to add that money spent on good supervision is money well spent. the budget of european banking supervision pales in comparison to the costs of a fully - fledged banking crisis. conclusion i am deeply invested in all the topics i have talked about today, so i could go on speaking about them for hours. but let me conclude. i hope to leave you with a simple message. central banking is a complex business. the ecb ’ s objective of price stability is clear. but delivering on our mandate requires us to deal with a constantly evolving world, and i would be remiss if i told you it ’ s a simple task. our new competences for macroprudential and microprudential policy have made it even more complex. but i believe we have shown the ecb is up for the challenge. it is telling that although scholars have tried to define what central banks are, and what they should do, for such a long time, we are still debating these questions today. and indeed, the answer is not clear - cut. history has shown that price stability and financial stability are deeply connected. you can ’ t have one without the other. so to deliver on our mandate of price stability, we cannot turn a blind eye to financial stability. as regards monetary policy, we will work to maintain price stability. as regards financial stability, we will continue to cooperate with european and national institutions to work towards a stable financial system. and as regards banking supervision, we will work to make banks safer and sounder. i wish i could tell you it is always easy to neatly separate these worlds. it is not. but i am confident that all the bright, competent, and committed europeans working for eu and national institutions can make it happen. thank you for your attention. 1 ugolini, s., the evolution of central banking : theory and history, palgrave macmillan, london, 2017. 2