different colleges to preserve a level playing field for the industry as a whole. the second step towards more effective and efficient cross - border supervision concerns the decision - making process in colleges of supervisors. whereas decision - making in existing examples of colleges is entirely on a consensus basis, i believe that the role of the lead supervisor or consolidated supervisor should be strengthened in order to avoid stalemates. both for efficacy and efficiency reasons, decision making in colleges should resemble the clauses on internal model validation in the capital requirements directive. these call on home and host supervisors to agree but ultimately, if consensus is not reached, allow the home supervisor to decide. let me emphasise that the lead supervisor model requires a close working relationship between the host and the home supervisor, in which the host supervisor is taken seriously. in practice, a distinction could be made between general colleges with broad information sharing, and core colleges with high frequency meetings particularly during periods of stress. a formal mediation mechanism could be considered to provide host supervisors a way to appeal against decision - making by the college or the lead supervisor. besides more effective supervision, lead supervision will also promote greater efficiency. the financial sector ’ s strong support for this supervisory model underscores this. ensuring effective interplay between supervisors and central banks besides effective and efficient cross - border supervision, another challenge is to ensure an effective interplay between banking supervisors and central banks. as european banks have clearly grown in prominence and wholesale markets have become closely integrated, problems at individual banks are more likely to have systemic effects. consequently, it is difficult to draw a line, in practice, between the responsibility for systemic stability, including the function of lender - of - last - resort, and that for prudential supervision of large banks. indeed, in today ’ s increasingly market - based financial system, disturbances are likely to affect core market mechanisms. in my view, there are two necessary conditions for effective cooperation between central banks and banking supervisors. first, a cooperative and open mindset is required. second, close and continuous information sharing is necessary. for the execution of central bank functions, timely access to micro - prudential information on individual banks is relevant. in the financial turbulence, information on the liquidity arrangements of counterparties, their sources of funding, and on their financial position has proven to be essential to obtaining a clear picture of the liquidity pressures influencing banks. conversely, the information central bankers have on the functioning of money and credit markets is indispensable for prudential

as a necessary complement to the single monetary policy. a true macroeconomic stabilisation mechanism should be configured as a permanent institution, with sufficient size, authority in tax matters and financing capacity. the creation of such a mechanism is undoubtedly the first task awaiting the countries of the euro zone that i wished to highlight. this mechanism is pivotal insofar as the euro members share a common monetary policy regardless of their different positions in the economic cycle. secondly, it is also essential to conclude the banking union, in particular by reaching an agreement to achieve a truly and fully mutualised european deposit guarantee fund to guarantee financial stability and address financial fragmentation. thirdly, it is necessary to move towards the implementation of a true european capital markets union, eliminating the barriers currently in place ( such as the differing insolvency regimes in each country ). it is important to bear in mind that european capital markets are underdeveloped and poorly integrated when compared, for example, with those of the united states. we cannot allow ourselves to miss the “ opportunity ” that this crisis has offered us to internally strengthen our common european project and strongly project our values and interests to the world. it is time to take decisive steps towards greater european integration in order to reinforce the european project and play a leading role in strengthening multilateralism. it is the appropriate way to emerge stronger from this serious crisis. only in this way will we be able to offer a brighter tomorrow for future generations. 3 / 4 bis central bankers'speeches i have no doubt that the quality of the discussions today will allow us to deepen our understanding of these challenges and, hopefully, to draw some useful conclusions on how to address them from central banks, with an eye on serving our society. 4 / 4 bis central bankers'speeches