two main building blocks. first, a balance sheet assessment, which is a point - in - time evaluation of the asset side of banks ’ balance sheets. second, a forward - looking assessment of individual banks ’ capital positions and provisioning levels in the form of a stress test. this stress test, and future stress tests undertaken as part of the ssm ’ s regular supervisory functions, will be conducted in close cooperation with the eba, in particular regarding the design and timing of the exercises. european systemic risk board as regards interactions with the european systemic risk board ( esrb ), the activities of the ssm will have a clear systemic dimension and so cooperation between the ssm and esrb will be essential. in particular, while macro - prudential powers will rest also with national authorities, the ecb will be able to use macro - prudential instruments, either at the request of national authorities or by deciding to adopt stricter measures than the ones adopted at national level. this implies an increased coordination function in the macro - prudential areas for countries within the ssm that will naturally create some overlap with the macro - prudential role of the esrb for the wider eu. however, i expect the macro - prudential functions of both institutions to be complementary. the esrb will play its role in adopting recommendations to help coordinating macroprudential decisions as provided for in eu regulation ( namely crr ), in particular with the countries that do not join the ssm. in addition, while the ssm will exclusively focus on banking systems, the esrb has an additional macro - prudential function regarding the nonbank parts of the financial sector, and as such will be well placed to address cross - sectoral issues. interplay with the other esas finally, let me be very brief regarding the ssm ’ s interaction with esma and eiopa. although the supervision of markets and the insurance sector will remain with the national authorities, bis central bankers ’ speeches esma and eiopa will play important roles in the coordination of information sharing between the ssm and the national authorities. in particular, cooperation with eiopa on the bank - led conglomerates will have to be very close given that the ssm is expected to take over their supplementary supervision. memoranda of understanding regulating these interactions will be prepared in the coming months. conclusion to conclude, it is unavoidable that the existence of the ssm will alter the functioning

with low productivity growth, this means higher business costs. chart : the krone has depreciated moreover, the krone depreciated markedly in the period to summer last year. a weaker krone means higher import prices. the krone is now a little weaker than before the monetary policy meeting in september and a little weaker than expected. the depreciation has been particularly pronounced against the us dollar, which has appreciated against many currencies in recent weeks. the dollar appreciated further in the hours following the us election. chart : modest rise in unemployment since we started raising the policy rate, unemployment has edged up from a very low level. at the end of october, registered unemployment was 2. 1 percent, in line with our september projection. unemployment is still a little lower than in the period before the pandemic, and the number of job vacancy postings is high. chart : the policy rate will likely be held at today's level to the end of the year the committee judges that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon. the committee is concerned with the possibility that if the policy rate is lowered prematurely, inflation could remain above target for too long. on the other hand, an overly tight monetary policy could contract the economy more than needed. when we set the policy rate, we have to balance these trade - offs. the economic outlook is uncertain. the committee will have received more information about economic developments ahead of its next monetary policy meeting in december, when new policy rate forecasts will be presented. 2 / 2 bis - central bankers'speeches