jurgen stark : towards a safer financial system speech by mr jurgen stark, member of the executive board of the european central bank, at the transatlantic business conference, organised by the american chamber of commerce, frankfurt am main, 9 november 2011. * * * ladies and gentlemen, it is a pleasure for me to speak to you tonight at the transatlantic business conference. 1. looking back to 2008 / 09 it is exactly three years ago that the g20 finance ministers and governors met for the first time after the lehman default. in sao paulo, on 9th of november 2008, the group of twenty recognized that “ the global economy is facing its most serious financial crisis and economic slowdown in decades ”. 1 in that meeting, they also pointed to the root causes that have led to the crisis : “ [ … ] the current financial crisis is largely a result of excessive risk taking and faulty risk management practices in financial markets, inconsistent macroeconomic policies, which gave rise to domestic and external imbalances, as well as deficiencies in financial regulation and supervision in some advanced countries. ” the g20 members drew the conclusion that “ all countries [ … ] must improve their regulatory and supervisory regimes. ” let me in my remarks tonight discuss where we stand with this g20 process and assess, particularly, what has been achieved regarding the financial market regulations agenda. my focus will be on the basel iii framework and the priorities for the future. i will then broaden my perspective and turn to the question on the role of finance for economic growth more generally. so let me briefly discuss how we reached the point where we stand. following the november 2008 meeting in sao paulo, the g20 meetings in washington in the same month, in london in spring 2009 and finally in pittsburgh in autumn 2009 led to an agenda for putting financial regulation on better footing. already the declaration of the washington summit established the major principles that should henceforth guide the reform of financial markets : first, strengthening transparency and accountability ; second, enhancing sound regulation ; third, promoting integrity in financial markets ; fourth, reinforcing international cooperation ; fifth, reforming international financial institutions. as for the call for better regulation, the declaration pledged “ to strengthen our regulatory regimes, prudential oversight, and risk management, and ensure that all financial markets, products and participants are regulated or subject to oversight, as appropriate to their circumstances. ” the g20 leaders ’ statement of pittsburgh in 2009 foresaw “ strict and precise timetables ” for the implementation of the reforms

##pranational guarantee ; – banking resolution ( crisis management ). bis central bankers ’ speeches of course, such a leap will require numerous steps and the elimination of a large number of substantial obstacles. but what it requires most is an unfailing political will from all euro area members to progress towards a stronger and more coherent economic and monetary union. after all, the greatest advances in the european project have always come in reaction to crises. and we should remember the prediction of jean monnet : “ europe was born out of crises and will be the solution to these crises. ” bis central bankers ’ speeches