that it is not only technical and business model differences which have to be overcome. sepa is a european integration project, as is sepa for cards. as a member of a european multi - cultural organisation i know of the importance not to overlook the cultural dimension either. an open mind and clear objectives are key in this context. with regards to the additional european card scheme, all participating parties should clearly recognise the objective of building a basic service, as a first step which can be further enriched by each individual issuer and acquirer. let me reassure you that i am confident that all remaining challenges can be addressed and overcome and creative initiatives will be rewarded by success in the market. in this context, i would also like to underline the importance of communication. in this regard, i very much welcome the clarifications provided by the epc on the sepa cards framework published last week on 26 june. proper communication is crucial for the success of sepa as all stakeholders need to be aware about sepa and the benefits it will bring to them. this clarification on the sepa cards framework brings more clarity on what sepa represents for the payment cards in europe. i expect that this is only a first step of the banking industry in enforcing their communication vis - a - vis their users and that the work of the banking industry on this crucial projects get more visibility in the months to come. the ecb continues to stand ready to support the banking industry in this task. closing remarks to conclude – sepa is a far reaching initiative. it will reshape the market for retail payments in europe. sepa is a promise – stalling does not lead anywhere and operating many parallel systems is costly. sepa for cards means decision for cross border solutions, new initiatives and creative ways forward are needed. sepa means changes. our host country has proven : it can be done ; belgium with the public sector in the lead is proving it can be done and other countries will follow. this is the reason why a central banker remains interested in the project and i hope any of you will be too.

tend towards exaggerations even more than individuals ; crowd psychology plays a significant role in pricing. • given the potential for damage as a result of undesirable developments and the incentives to which participants are exposed, it is obvious that self - regulation alone is not sufficient in financial markets. 3. requirements to be met by regulation and supervision against this background, the question is which regulatory or supervisory approach is the right one for a modern financial system. should financial markets be subject to all - encompassing regulation in which every single activity is regulated down to the smallest detail? my answer is “ no ” – because this would not have a satisfactory outcome, either. depending on its design, such a rule book would either be permanently outdated and incomplete, because legislators cannot keep up with the rapid pace of innovation within the financial sector with meticulous regulation, or would have to regulate so rigidly that it would impose excessive restrictions on the functioning of the financial system. as is often the case, the most sensible option is in the middle. we need regulation based on principles which adapts to changes in banking and we need a supervisory authority that is capable taking action. allow me to elaborate. • good regulations must be adaptable. they must be just as applicable to different business models as they are to different sizes of institution – they must fit large and small institutions alike. good regulations must adapt to changing circumstances without legislators having continually to improve on them. accordingly, the rules must provide room for discretion in individual cases. • good regulations must, however, also ensure a minimum level of planning and legal certainty for banks ; that is the only way in which banks operate properly and provide their financial services over the long term. this holds particularly true of europe, where banks play a greater role in financing the real economy than the capital markets. at the same time, there has to be a global understanding of what regulation means, since regulations could otherwise, given the global interconnectedness of financial markets, be easily leveraged and since fair competition can only be assured when the rules of the game are the same. • i remain convinced that regulation and supervision must be sensitive to risks. this means that the bank that takes greater risks and poses a greater threat to financial stability must also be subject to stricter rules and / or limitations on its business bis central bankers ’ speeches activities. if our set of rules was to treat different risk profiles in the same way, then we would subject conservative, low - risk banking business with low