step backwards. i do of course realise that it is unrealistic to ask for the creation of an international institution with supranational powers to deal with distressed cross - border banks. so, in the absence of a common global regime the best we can do is to try to develop a common international approach to crisis management and resolution. if we cannot do it as one, at least we need to make sure that we can do it similarly and in a coordinated fashion. so we need to embark on an even bolder agenda than the present supervisory reforms. here, we may draw some inspiration from the last century. after the war we created the imf to provide some basic rules for the monetary system, recognising that the system is interlinked and that problems in one country may also create problems in others. in the 1980s we agreed on the basle accord with joint supervisory rules for the internationallyactive banks. recognising now that supervisory convergence hinges on agreement on crisis management and resolution, i think that it is time to address this issue in a serious way. i see this as a necessary step for europe, given our single market. but in a broader context too, it will be a natural step towards strengthening the global financial system. thank you.

stefan ingves : the housing market, the banks and household debt speech by mr stefan ingves, governor of the sveriges riksbank, to the riksdag committee on finance, stockholm, 1 march 2011. * * * the origins and the course of the financial crisis can be described in slightly different ways and in more or less detail. i will not provide any detailed account here – i have already done so on more than one occasion, not least here before the riksdag committee on finance. an essential component of the crisis was the build - up of credit and house price bubbles over a number years in a number of countries. when these bubbles burst, the financial system was rocked to its foundations, and governments and central banks around the world were forced to take exceptional measures to stabilise the situation. the decades prior to the crisis were marked by extensive deregulation of the financial markets. there was a strong belief that the financial sector was to a large extent selfregulating, and that it was able to resolve most problems on its own through market incentives. this belief was seriously undermined during the crisis. there is now considerable international agreement that the market ’ s ability to “ manage itself ” was overestimated, and that regulations need to be stricter and supervision tightened. of course, what one wants to achieve is to reduce the risk of future financial crises. although more and stricter regulations may be linked to a certain cost, for instance, in the form of higher interest rate margins, studies indicate that this is more than counterbalanced in the long run by more favourable economic development. 1 i would like to point out that i am not talking about a return to the strictly regulated credit and finance markets we had before – deregulation has of course had some positive effects and meant that the economy in many ways functions better. but i think that most people will agree that the financial sector needs a tighter rein than it has had for the past fifteen, twenty years. tighter regulations and supervision planned reform work is already under way on an international level. the basel iii rules, which in brief entail the banks having to hold more and better capital and larger liquidity buffers, are one example of this. in the supervisory field, the eu has established a special body, the european systemic risk board, which is to identify risks in the financial system as a whole and to provide warnings and recommendations to the countries and authorities concerned. sweden of course supports