banks so that they can better assess the potential systemic impact of a liquidity shock. the ecb supports the idea of organising common liquidity stress tests, for which participating banks would use their own stress tests based on a joint scenario. furthermore, the contingency funding plans of large banks should be shared not only with banking supervisors but also with central banks, as also recommended by the fsf. having said that, i would like to stress that financial institutions are ultimately responsible for ensuring that all relevant risks, including liquidity risk, are properly integrated into their overall risk management. in this vein, the full and timely implementation of the principles and best practice recommendations developed by both the public authorities and the industry, as well as a regular assessment of this implementation process, are of utmost importance. the second issue that i would like mention is that of procyclicality, and in particular the extent to which the current regulatory framework could encourage the procyclical behaviour of financial institutions. this is a complex issue as procyclicality depends on many factors. although the way in which financial institutions manage their risk is regarded by many as the main determinant of procyclicality, other elements such as capital requirements, accounting standards or banks ’ compensation schemes can act as contributing factors. in terms of policy action in this field, in the short term, regulators are determined to avoid measures aimed at tightening capital requirements, as these could impinge on the financial standing of banks and negatively impact the supply of credit and, in turn, the whole economy. at the same time, the contributing factors to procyclicality must be looked at from a longer - term perspective. finally, i would like to address the importance of cross - border cooperation between central banks, supervisors and regulators in the current context. indeed, the significant impact of the crisis in the us sub - prime market on other parts of the world highlights the importance of improving cooperation between national authorities, both for preventing and for resolving shocks. on the crisis prevention side, it has now been agreed that there is a need to reinforce multilateral surveillance at the global level. to this end, the fsf and the imf will intensify their cooperation with a view to enhancing the assessment of financial stability risks on a global scale as well as to coordinating possible policy responses. this endeavour should be mirrored at the national and the regional level by heightening the level of cooperation and exchange of information between central banks and supervisory authorities

in the united states are further reinforcing this very impressive implementation of the plan that has been approved by the international community. this is no time for complacency. central banks will remain solid anchors of stability and confidence. public authorities must be alert, decisive and effective at a global level : this is not a problem of the industrialised countries alone ; this is a global issue that has to be addressed with the full participation of the emerging countries. at the same time, private financial institutions and market participants must behave wisely, prudently and with a solid sense of responsibility. it is time to keep our composure. i thank you for your attention.