rating agencies play in structured credit markets. the growing complexity of instruments has clearly induced some investors to overly rely on ratings. this is the more risky as ratings in structured finance are not yet as much tested as those of corporate issuers. some investors may also have misinterpreted the risk dimensions covered by a rating. against this background there is probably scope to improve the information content of ratings and to make the monitoring process more transparent. it also needs to be investigated further to what extent conflicts of interest may have arisen for rating agencies in their credit risk assessment of structured credit instruments. several international fora are currently looking at those issues. fourth, the turmoil has revealed some challenges for the liquidity management of banks. banks, including those in continental europe, have increasingly relied on secured funding, both via securitisation and off - balance sheet vehicles. this has rendered them more vulnerable to a sudden disruption of structured credit markets. let me recall that the regulatory framework requires eu banks to have policies and procedures for the measurement and management of net funding positions on an ongoing and forward - looking basis and have in place contingency funding plans. in this context, recent events have demonstrated that banks need to further strengthen their liquidity risk stress - tests, encompassing for example scenarios such as a protracted closure of a broad range of securitisation markets and the drawing of contingent liquidity obligations by commercial paper programmes. moreover, those elements should also be incorporated into their contingency funding plans. the ecb, together with the escb banking supervision committee, is carrying out work on this important topic. indeed, the current turmoil has underscored the importance of robust liquidity management by banks, as well as the need for supervisory approaches which keep pace with structural market developments. many initiatives with a view to addressing issues and risks arising from the recent financial market turbulence that go into the right direction have already been launched, both at the international level, namely by the financial stability forum, and at the eu level, with the ecofin agreeing to a roadmap for action by 2008, and also by the private sector. they must be pursued now with even stronger impetus. in this respect, co - ordination at the global level should be ensured. in closely interlinked financial markets, any policy measure should be agreed to and consistently applied at the international level. fifth, in the same vein, there is a need to reflect carefully on the “ originate - anddistribute ”

the financial stability forum, which has been set up by the g7, under the proposal of hans tietmeyer, to draw the lessons of the asian crisis, is in an ideal position to identify the areas where appropriate improvements could be introduced. i encourage very strongly the financial stability forum and all the committees that are actively working at a global level, including the basel committee, to draw all the lessons of the present turbulences and to examine the situation without any complacency. in my view no single area should be put aside from this review which should concentrate on the ways and means to foster financial stability, prevent propagation of disturbances and contagion, improve risk management at all levels, and diminish procyclicality, in particular, in the domains of accounting rules and accounting practices of rating agencies, of supervisory banking rules – the first duty being to implement globally basel ii which is largely superior to basel i – including harmonisation of liquidity rules and requirements, of supervisory insurance rules, of market supervisory authorities regulations, of regulated and non regulated private institutions ( whether highly leveraged institutions or so - called s. i. v. and conduits ), and of market practices. this does not mean necessarily dramatic changes of rules and overloading of new regulations. i am of the firm opinion that voluntary code of best practices, the set up of voluntary “ principles ” and the working out of voluntary benchmark best practices are most of the time preferable to the addition of new layers of rules and regulations. but we have, in any case, the duty to be effective in working out the lessons of the present market correction. this is no time for complacency in any respect. thank you very much for your attention.