petersburg. however, one thing should be clear : when we develop regulatory proposals, we need a thorough understanding of their implications. let me briefly touch upon repo markets, an important source of leverage and pro - cyclicality. in order to thoroughly assess the effects of envisaged numerical floors on haircuts for the securities lending and repo market, a quantitative impact study is just being launched. i strongly support this approach. it facilitates early recognition of inadequate measures and unintended side - effects. it therefore allows us to introduce effective measures. the shadow banking system will constantly challenge policy makers because it adapts very quickly in order to evade regulatory measures. regulatory arbitrage is a reality we have to face. it is therefore essential that we make sure regulatory measures are consistent – not only across sectors as i already pointed out but also across jurisdictions. regulatory measures must be developed and agreed upon in international cooperation. in addition, i expect the financial industry to set in train a rethinking towards more risk awareness. only in bis central bankers ’ speeches this way can the weaknesses that were exposed in the financial system be remedied in the long run, and the financial system be made more resistant to future crises. my brief excursion into the shadow banking sector and the challenges it presents for regulators illustrates that the elimination of systemic risks is not easy. and in doing so, we face obstacles and challenges. thus, i end almost where i began : reality requires ambition. thank you very much for your attention. bis central bankers ’ speeches

andreas dombret : the yin and yang of resolving the european sovereign debt crisis speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the peterson institute, washington dc, 17 october 2013. * 1. * * introduction ladies and gentlemen thank you for having me here today. it is a great honour to speak at an institution as distinguished as the peterson institute. for more than 30 years now, the institute has provided essential analytical input for the work of policymakers around the world. and when i say policymakers, i explicitly include central banks, as the institute ’ s president, adam posen, has intimate knowledge of our trials and tribulations. he served on the bank of england ’ s monetary policy committee and has worked with many other central banks including the bundesbank. he is therefore in a unique position to provide analysis and advice to central bankers such as myself. such advice is especially valuable in turbulent times such as these. looking back, we see a crisis that has spanned more than six years. it began with turbulence on the us housing market, followed by a global financial crisis, a global recession and a sovereign debt crisis in the euro area. it is this last episode i would like to focus on in my speech. mark twain once said : “ a man who carries a cat by the tail learns something he can learn in no other way ”. applied to the euro area, it seems that we have had the cat by its tail more often than not over the past three years. and as mark twain predicted, we have learnt a lot. we have learnt a lot about the inner workings of the european monetary union – both economically and politically. true, everybody looks at the crisis from a slightly different angle but it seems that most of us have learnt the same lessons. at least in terms of the causes of the crisis, most of us seem to have made the same diagnosis. according to this diagnosis, the main causes of the crisis can be found at the national and at the european level. at the national level, there was high public debt and a lack of competitiveness in those countries that are now at the centre of the crisis. at the european level, there were weaknesses in the institutional framework of monetary union. but if most observers agree on the diagnosis of the crisis, why can ’ t they agree on the appropriate therapy? why is such a vast array of cures proposed? in my speech, i would like to