governance and risk management in banks. the recent review of the basel core principles effective banking supervision is therefore very timely and welcome. the matter has been amply discussed in previous interventions in this conference and i shall not pursue it in detail. i concur with other speakers that the use – in a nonmechanical way – of market signals and indicators like a rapid growth of assets is important – and, in fact, already widespread. in general, sharpening supervisors'tools is surely needed. let me only sound a note of caution on all this. even with the best principles and tools, supervisors will never be omniscient or omnipotent. with the benefit of hindsight, one can always find a better course of action that the authorities might have taken in a specific case. however, without perfect foresight, and with no waterproof basis in regulatory requirements, it is not always obvious that the authorities would have been in a position to do beforehand, in an analytically and legally robust way, what post factum appears optimal. supervision must be continuously improved, by all means ; but regulation remains fundamental. further issues for the future finally, looking beyond microprudential rules for banks, let me mention two further issues that the broader system of financial regulation needs to address - and are, in fact, being actively discussed in international fora. 1. countercyclical macroprudential rules. disruptive exogenous shocks ( the pandemic was an extreme case ) require releasable capital buffers. the basel committee has endorsed the concept of using cycle - neutral positive buffers to absorb systemic shocks and avoid procyclicality. many european countries, including italy, have introduced this measure with, as far as i can see, minimal costs. 2. non - bank financial intermediaries ( nbfis ) : nbfis'share in financial intermediation, and their interconnections with the banking system, have grown considerably. credit suisse's exposure to archegos and greensill is just one example of the latter ; the basel committee's reflections5 on it are a valuable starting point for defining better rules for banks. more generally, the fsb's work on nbfis'impact on financial stability is proceeding, albeit slowly. to conclude : the 2023 market turmoil has lessons for regulators and supervisors. 4 / 5 bis - central bankers'speeches banks have proven resilient, but

deviation from the rules or for the use of financial means not coming from the market. handelsblatt : because of the financial crisis, rating agencies have been highly criticised. do you think the ecb should provide for its own ratings, as some have suggested? mr draghi : no, i do not think that would be right. the creation of an european rating agency could represent a solution if we have no trust in the american rating agencies or in any other. but this task should still not be entrusted to a central bank. handelsblatt : why have the experiences with credit rating agencies been so unsatisfying? mr draghi : loopholes in regulations have allowed for conflicts of interest. one should wonder why the rating agencies did not see the big amount of dubious financial products being created between 2005 and 2008 and why they could not rate it properly. one of the answers is that the issuers were basically a few big investment banks. so, for some of these rating agencies it became clear that 90 % of their business was done with these banks. this is exactly why they have been captured by the banks. much has been done to change this, but there is still a lot do be done. handelsblatt : what are you thinking of? mr draghi : we have a project in the fsb now where we, as regulators, are looking for a way to reduce the importance of rating in regulation. we must look for alternatives and define other mechanisms. handelsblatt : but markets need ratings … mr draghi : markets need rating. investors want ratings. at the fsb we think there is the need for a better differentiation. one thing is a triple - a government bond, one other thing is a triple - a structured bond. it is always possible to have a structured bond in a way that it has a triple - a, even if the components are “ junk ”. so we must have ratings from the agencies which allow investors to distinguish one triple - a from another triple - a. handelsblatt : when are we going to find a solution? which are the further steps in the reform of financial regulation? mr draghi : one of the two most important projects the fsb now has is the capital and liquidity regulation, the reform of basel 2. its implementation is scheduled at the end of 2012. handelsblatt : is it right to fear that basel iii might limit credit flows, prejudging economic recovery? mr