alone, it is easy to agree that market discipline would be more effective under more harmonious - if not completely harmonised - accounting rules. but the task is formidable : a reporter from the wall street journal questioned recently how accounting rules could be harmonised when, for example, europeans and americans do not even agree on which set of measures should be used in the kitchen. in our efforts to strengthen financial stability, central banks and supervisors have a legitimate interest in the quality of accounting standards and their effective implementation. we believe that in order to contribute to strengthening the banking system, accounting standards should support - or at least be consistent with - sound risk management and control practices in banks. in addition, they should facilitate market discipline by promoting transparent financial reporting of banks ’ financial position and performance, risk exposures and risk management activities. finally, accounting standards should facilitate the effective supervision of banks. this is why, as you know, the committee has attached great importance to taking an active role in the international debates on accounting and promoting the supervisory perspective on key accounting issues, and we very much support the work towards convergence in international accounting. we have worked closely with our colleagues in the international accounting standards board to avoid conflicts between pillar 3 and the broader accounting standards. in fact, the committee views pillar 3 as a further refinement of the accounting standards that apply to banks ’ specific exposures. because we recognise that we have much to do in this area, we will continue to monitor accounting and market developments in the light of pillar 3. our dialogue with accounting standards - setting bodies and the accounting profession will continue to grow in the years to come. conclusion : basel committee & the global research community i hope that this conference will help to identify the policy options that supervisors have in order to address emerging issues in risk management, financial reporting, and transparency so that we can work toward a more stable banking system. we can expect the financial services industry to quantify new aspects of risk while refining the existing measurement and management techniques. innovation and advances in the banking industry ’ s quantitative tools will open up many new areas for us to study that may enhance our ability to interpret financial information, to aggregate and report data, and to leverage the power of markets to motivate responsible business behaviour. on that note, on behalf of the basel committee, i would like to thank the research community in member agencies, in academic circles, and in the industry for your contributions to our work. many of basel ii ’ s advanced methods for

quantifying risk were first explored in research units within individual financial institutions, but also in central banks, supervisory agencies, and universities. our contacts with researchers, the work of the research task force, has helped us to gain access to some of the best research being done in risk management. equally important, it helped to translate the results of some of the most sophisticated technical advances into tangible tools for implementing public policy objectives. applied research cannot be conducted in a vacuum, and good research is rarely achieved alone. in that vein, i look forward to continuing a vigorous dialogue with researchers from many institutions as we explore ways to safeguard depositors ’ savings, to ensure prudent risk management in banks, and to secure more stable growth in the economy. i hope that you find tomorrow ’ s sessions to be equally stimulating and enjoyable, and i thank you for your attention this evening.