sector healthier, stabilise economies and so improve the world. 24. and the need for these reforms is evident. a recent imf study, for instance, estimates the costs of a financial crisis at around 15 percent of gdp, while research that factors in the long - term impact of a crisis might easily arrive at a multiple of this figure. with the measures we discussed, future crises will become less probable. at the same time we should realise that this objective is not presented to us on a silver platter. all the parties involved will have to work hard to meet all the requirements now that implementation is the next challenge. so let us not wait too long, and start making plans instead. thank you for your attention.

aware of all the difficulties involved. but if the end goal is european supervision for pan - european financial institutions, there is no alternative. for burden sharing arrangements to be credible, they should be legally binding and preferably enshrined in the treaty. it is a misconception that effective burden - sharing arrangements can be made in memoranda of understanding. burden - sharing arrangements should also be incentive - compatible. to this end, a mix of general and specific burden - sharing is preferable. under an arrangement of general burdensharing, all member states contribute proportionally, e. g. to the size of their economy, implying a partial transfer of budgetary responsibility to the eu level. this makes sense, since the stability of the european financial system is a public good and of benefit to europe as a whole. the proportion of general burden - sharing should be kept relatively low however, as it involves cross - border fiscal transfers. this explains why specific burden - sharing arrangements are also needed. under such arrangements, only the countries confronted with a financial institution in difficulty contribute. firm - specific arrangements give member states the right incentives to perform their supervisory duties well. although a decision on burden - sharing is a necessary condition for a fundamentally new european supervisory structure, we can still make progress without it. in this respect i envisage grey and white areas. white areas refer to tasks that should be performed at the eu level. these tasks include the licensing and supervision of eu - wide institutions, such as credit rating agencies and platforms for over - the - counter derivatives. it is also conceivable that the lamfalussy process can be further streamlined by transferring certain decisionmaking powers to the authorities. close to the white areas, there are grey areas, which relate to tasks that can be transferred to the european level, but only if certain requirements are fulfilled. for instance, under the strict requirement that the confidentiality of supervisory information is guaranteed, the supervisory authorities could be given the competence to send binding information requests to national supervisors. one last point i would like to make about the new micro - prudential supervisory structure relates to its sectoral design. the group ’ s advice to start with sector - specific authorities should be reconsidered. the distinctions between financial sectors and products have become blurred, which makes a sector - based supervisory approach less effective. indeed, the trend in national supervisory structures is towards cross - sectoral supervision. the new european supervisory structure should follow this trend