on the one hand, cross - border banking broadens and deepens banking markets, increases liquidity and risk sharing and thus strengthens the overall resilience of the european financial system. on the other hand, national financial systems may be increasingly exposed to common risks, and financial disturbances may be transmitted more easily across borders. against this background, it is essential to ensure that the eu framework for financial stability is fully prepared to respond to the greater possibility that risks may be cross - border in nature or in origin. this calls for ( i ) enhanced interplay between home and host authorities, especially with regard to significant foreign entities in host countries, and ( ii ) the development of effective arrangements for dealing with large and complex eu banking groups. ii. policy initiatives what has been done so far to strengthen the eu financial stability framework in order to achieve these objectives? such a framework comprises arrangements for banking supervision, financial stability monitoring, crisis management and deposit insurance. in the area of banking supervision, two important policy initiatives have recently been taken to enhance home - host cooperation between supervisors and to strengthen cross - border arrangements for the supervision of large and complex banking groups. the first policy measure is the improved legal framework for supervisory cooperation regarding banking groups with foreign subsidiaries, introduced by the recently adopted capital requirements directive ( crd ). in particular, the crd entrusts the consolidating supervisor with 1 / 2 coordination responsibilities. it also strengthens and clarifies the requirements for information sharing and cooperation between all authorities responsible for the supervision of group entities. this improved framework should promote and facilitate effective supervisory cooperation, especially for large groups that are active in several countries. the second important policy measure is the extension of the lamfalussy framework to include the banking sector and the related activities of the committee of european banking supervisors ( cebs ) to promote supervisory cooperation. the forthcoming cebs guidelines for supervisory cooperation will provide concrete guidance for the effective and consistent implementation of the revised legal framework for cross - border banking groups. this will also increase the effectiveness of the arrangements for supervisory cooperation with regard to cross - border banks that have a significant number of foreign branches in host countries. i would also like to remind you briefly that important initiatives have been taken to enhance the other public policies safeguarding financial stability. for example, in the area of financial stability monitoring, the economic and financial committee ’ s recently established financial stability table has played an important role in forming a comprehensive assessment of risks to financial stability in the eu

1 kilometre from where we meet today, would have anticipated the role this forum would gain in global governance within one decade. the upgrade of the g20 from a finance ministers ’ to a heads - of - state level in november 2008 strengthened its political profile even significantly further and we have seen a similar development on european level from a finance ministers ’ format – the eurogroup – to leaders ’ level – the euro area summits. this “ upgrade ” of the g20 to the leaders ’ level led to its elevation to the status of premier forum for international economic cooperation at the pittsburgh summit of 2009. the membership of other key international fora has been extended to overlap with that of the g20, such as that of the financial stability board, which plays an active part in strengthening the international financial architecture and global financial stability. imf quotas and governance have been adjusted in 2010 to raise the voting shares and representation of large dynamic and emerging market economies. and the largest of these economies ( brazil, russia, india, china and south africa ) now meet regularly at the level of leaders to discuss issues of common interest since the yekaterinburg summit of 2009. the g20 ’ s promising start has unfortunately been followed by more mixed results. the first three g20 leaders ’ summits of 2008 – 09 ( washington, london and pittsburgh ) led to important achievements. concerns that the global economy was on the verge of the most severe downturn since the great depression helped forge agreements on a joint macro - policy response, on increasing imf resources and on a financial repair and reform agenda. the seoul summit of 2010 proved less ambitious, although the imf quota and governance reform was then widely regarded as a welcome step. since then, the g20 has lost further momentum with the cannes and los cabos summits delivering more modest results, putting in questions the g20 ’ s effectiveness and by this its credibility. this loss of momentum is to an important extent due to a waning sense of urgency. at the height of the global economic and financial crisis in 2008 – 2009, g20 leaders collectively agreed on the root causes of the problems and on the urgency and course of action needed to overcome the crisis. since the global economy stepped back from the brink, progress has slowed down as world leaders feel less pressured to strike deals. as a result, some have noted that “ active involvement ” has moved into “ passive avoidance ”. 8 hence global economic governance as we know it today seems to be well equipped