yves mersch : shaping a new regulatory framework – international banking at the crossroads speech by mr yves mersch, governor of the central bank of luxembourg, at the conference “ the emerging framework to strengthen banking regulation and financial stability ”, organised by the financial stability institute, bis, and hosted by the arab monetary fund, abu dhabi, 8 november 2010. * * * let me start by thanking the arab monetary fund and the fsi of the bis for providing the opportunity to present my views on financial sector reform in the post crisis era from the perspective of international banking. the topic is vast, and i shall not attempt to deal exhaustively with its numerous dimensions, but rather concentrate myself on one key component, namely cross - border banking flows. i will describe their main drivers, explore their impact on financial stability, and review major reforms currently discussed and aimed at maximizing the benefits of international banking. international banking : drivers, effects and impact on financial stability cross - border flows have expanded enormously in the last three decades. since the second half of the 19th century, the internationalization of banking has proceeded in several waves. the most recent waves followed the liberalization of the early 1980s and the expansion of subsidiaries and branches in emerging and developing economies since the second half of the 1990s. measured by the expansion of cross - border lending and the local claims of foreign banks, the scale of international banking increased dramatically since the beginning of 1980s, also in the gulf states ( figure 1 ). while international claims vis - a - vis developing countries are less than 20 percent of claims to developed countries, there has been a recent acceleration of the former. in the last half of this decade, the increase in the share of loans to non - banks in the gulf states is noticeable, and it reflects the internationalization strategy of banks which have favored extending credit by local affiliates to cross - border lending. until the beginning of this decade, international banking growth tracked well the increasing world integration as measured by international trade growth. more recently, however, cross - border flows have grown faster than international trade reflecting the emergence of risk transfer and securitization thus making international banking an important component of a broader process of globalization and integration. capital flows have not been uniformly distributed across countries, and a crosscountry analysis of net international positions show large imbalances and persistent net creditor and debtor positions ( figure 2 ). the most important ultimate macroeconomic drivers of international banking are the regulatory environment and technological developments. while

klaas knot : beyond the rules - promoting an ethical culture in central banks and supervisory authorities speech by mr klaas knot, president of the netherlands bank, at the netherlands bank ethics and compliance conference, amsterdam, 7 november 2024. * * * at the eurovision song contest of 1980 – that was long before the time when artists were disqualified for alleged misconduct - the dutch singer maggie macneal came in fifth with the lyrics'amsterdam, amsterdam, de stad waar alles kan '. in english, this means :'amsterdam, amsterdam, the city where anything goes '. now, especially for compliance officers this may sound like a particularly alarming statement. you may wonder : is this an appropriate venue for a conference on ethics and compliance? but i can reassure you, things have changed, and even in this city some degree of law and order has returned. so when i became governor of the dutch central bank 13 years ago, i could not have imagined that one day i would be confronted with the issue of a stolen coat. it was a white coat, a woman's coat that was stolen at our coffee bar sometime last year. with bicycle keys and all. not very material in terms of value lost, but a serious breach of trust among colleagues. so our compliance officers investigated. unfortunately, the coat was never recovered. what this story is telling me, and why i am telling it to you, is that the people working in our institutions are just a cross - section of society. at the same time, we work for organisations that perform a very special public task. keeping the financial system safe and sound. people trust us. if we breach that trust, it not only damages our organisation, it affects the entire financial system. what's more, as a supervisory authority we impose all kinds of standards on the financial sector, including ethical ones. if we do not live up to the standards we impose on others, we lose all authority. this means that we have to set the bar on ethics and compliance in our own organisations very high. at dnb we set up a professional department and integrity framework in 2008. the framework includes controlling the risk of fraud and corruption, insider trading, lobbying, and conflicts of interest. we also placed additional emphasis on inappropriate behaviour and its prevention. similarly, at the ecb i have witnessed the development of one of the most stringent ethical standards in the world. the ecb was among the first to establish an ethics committee