on an ambitious reform of the institutional model for supervision are admittedly more favourable. i thus believe it would be worth considering again plans to reform the supervisory framework, taking as a reference, as was envisaged in 2008, the twin peaks model prevailing in europe. in any event, the new supervisory model should be adjusted to accommodate, as it has in other countries, the setting up of a macroprudential committee ( on which government authorities and supervisors would sit ) coordinated by the banco de espana. further, so as to reinforce the investor protection function, we should also explore the possibility of incorporating into the new framework a reinforced system for resolving conflicts between bis central bankers ’ speeches financial institutions and their customers – the current claims systems – that would provide for the issuing of binding rulings for the institutions concerned. final remarks ultimately and unquestionably, notable steps have been taken to adjust the organisation of financial supervision in spain to the new demands of the regulatory and institutional environment in europe. that said, drawing on the reforms successfully applied in other jurisdictions akin to ours, it would be worth reflecting on additional changes that contribute to facilitating the preservation of financial stability, suitably protecting investors in and users of all types of financial services, ensuring the proper functioning of markets and providing for the effective management of financial crises with the minimum possible cost to taxpayers. in that connection, the right choice must be made in assigning specific objectives and instruments to the different agencies so that potential conflicts of interest may be mitigated while maintaining an appropriate level of institutional efficiency and ensuring the functional and economic independence of the supervisory bodies. i believe that the costly financial crisis we have just experienced is the best possible motivation for undertaking this reform when circumstances so allow it. bis central bankers ’ speeches

– and of compliance with rules of conduct by all financial institutions remain under the stewardship of the national authorities. these, as is moreover appropriately reflected in the report presented today, actively contribute to the supervisory and resolution functions exercised in respect of significant banking institutions at the european level, and they retain their jurisdiction over less significant institutions. accordingly, the relinquishing of sovereignty entailed by the banking union has not generally altered the organisation of financial supervision at the national level, although it has required the establishment of new european agencies that have assumed the competencies transferred from national jurisdictions. indeed, the organisation of the banking union adheres to a model involving a significantly stricter separation of functions than that prevailing in national jurisdictions. thus, two independent authorities have been created : the single supervisory mechanism, which turns on the ecb, and the single resolution mechanism, which does so on the board of the same name. moreover, although the ecb ’ s supervisory decisions are formally adopted by its governing council – which also defines monetary policy – these are prepared and pre - agreed by an independent supervisory board, meaning that the governing council acts only under the principle of non - objection. hence, when defining the institutional model of the banking union, the european legislator has set great store by preventing conflicts of interest between micro - and macroprudential supervision and monetary policy, on one hand, and between supervision and bank resolution, on the other. the aim is to mitigate the risk of monetary policy, geared to maintaining price stability, being tainted by considerations relating to financial stability, and to separate as far as possible the policies aimed at preventing solvency crises, which are pursued by the single supervisory mechanism, from those geared to managing such crises, which are the remit of the single resolution mechanism. the appropriate functioning of this model, based on the principle of separation, nevertheless requires the intense cooperation and coordination of the different authorities involved. in the case of the interaction between monetary and prudential policies, the necessary cooperation arises from the complementarity, at least in the medium term, between macroeconomic stability and financial stability and, above all, from the potential impact of the instruments available in one area on the objective pursued in the other. consider, for instance, the influence that the level of interest rates, which is decided by the central bank, has on variables so closely related to financial stability as the desire of banks and other agents to assume risk, or changes in financial asset prices. alternatively, bear in