interesting speeches on various aspects of this challenging topic in our conference programme for this afternoon, which deal with interaction and repercussion effects between financial reporting, financial regulation and financial stability. given that accounting data are used as the basis for financial reporting, regulatory reporting, and for market and financial stability analysis, you may hear some interesting views on, for example certain accounting approaches, and with regard to the extent of disclosures and transparency. turning to the third part of our conference that will deal with central bank balance sheets during the crisis, the financial crisis required unconventional monetary policy tools and liquidity support that had a considerable impact on the size of many central banks ’ balance sheets, influenced their risk profile and left marks on their financial buffers and profit and loss accounts. the eurosystem reacted to the financial crisis by increasing its intermediation in bank funding markets via an increased range of monetary policy instruments. consequently the eurosystem risk profile partially shifted and increased, from fx rate and gold price risk to credit risk related to domestic assets. any related counterparty default risk is however mitigated by adequate underlying collateral which provides an additional guarantee. the operational framework was adapted accordingly – examples thereof are the extension of credit maturities, outright purchase programmes for securities and changes to the collateral framework. similar developments were experienced by many central banks around the world. in the case of the eurosystem, the balance sheet expansion was largely due to an increase in the size and maturity of temporary lending operations under the fixed rate full - allotment tender procedures. the eurosystem had increased its lending to banks after tensions in the money market emerged in august 2007, but the increase in its balance sheet size remained relatively limited until september 2008 ; it became significant only after the collapse of lehman brothers. as of mid - 2012, excess liquidity and, concomitantly, the size of the eurosystem balance sheet have started to decline again. on 23 may 2014, monetary policyrelated lending to euro area credit institutions stood at eur 640 billion, which is roughly half as much as at the peak in 2012. other major central banks have conducted mainly largescale outright asset purchases. in the aftermath of the financial crisis, the eurosystem ’ s risk control frameworks were developed further and refined. the eurosystem ensures that it is protected in financial terms, inter alia, through the implementation of prudent risk management and accounting frameworks, and through a cautious allocation of its invested

comparable for investors. it will moreover address heterogeneity in banks ’ calculations regarding risk - weighted assets. many measures analysed in the comprehensive assessment exercise are based on accounting data. the vast majority of the banks undergoing the assessment report their accounts in line with ifrs. but some euro area banks still apply local generally accepted accounting principles ( gaap ). this creates challenges regarding the comparability of data at the european level. it is therefore now appropriate to discuss the links between financial reporting and financial regulation. in the context of applying a more harmonised approach to supervision, the european banking authority ( eba ) has developed technical standards for the regular reporting of banklevel supervisory data, using the crr / crd iv as a basis. accounting values are the basis for determining regulatory capital. nonetheless, accounting capital and regulatory capital reported under the new regulatory reporting standards will generally differ. this is due to the different objectives of accounting and supervisory data. consequently, prudential filters, as well as other instruments, are applied in order to adjust accounting figures to prudential figures. in addition to supervisory information, banks have to report further financial data to the supervisory authorities. these reports consist of “ pure ” accounting data without any regulatory adjustments and include the balance sheet, off - balance - sheet activities and the income statement, as well as detailed breakdowns thereof. the reported values are measured according to the applicable accounting framework, which is ifrs for most banks in the eu, as said before. furthermore, consistency of data reported in the annual accounts and regulatory reports has to be ensured. all these aspects show that banking supervisors have convincing reasons to call for the application of high - quality accounting frameworks. regulatory ratios and reports depend heavily on accounting figures, and the accounting framework applied can substantially influence the reported values. it is thus crucial for supervisors to understand the accounting dirk schoenmaker, “ the financial trilemma ”, economic letters, no 111, 2011, pp. 57 – 9. bis central bankers ’ speeches rules behind the figures and to promote sound accounting practices. therefore, i would like to emphasise once more that the ecb supports a greater harmonisation of accounting frameworks by applying ifrs, also with a view to ensuring equivalence in the supervisory assessment of reported data. indeed, it would seem desirable that all banks regulated under the ssm apply ifrs, thereby ensuring equivalence in any assessment of data dependent on accounting information. we have a number of