hypo real estate, which failed in 2009. third, taking banking supervision from the national to the european level will add a layer of separation between supervisors and the banks they supervise. this will prevent supervisors from treating their banks with kid - gloves out of national interest. you see that we have come to expect a lot from european banking supervision. but even though i am extremely optimistic, we have to bear one thing in mind : european banking supervision is an immensely complex operation that has been put together in a very short space of time. we should not expect everything to run smoothly from day one. it will certainly take some time before every detail is sorted out deep down in the engine room of actual banking supervision. let us take a tour down into that engine room and see how european banking supervision is organised and what that entails for the national supervisors. 3. the role of national supervisors a question i often heard during the run - up to european banking supervision was : “ aren ’ t national supervisors digging their own grave? now that supervision has been transferred to the european level, where will that leave you as national supervisors? ” first of all, we should certainly not succumb to the illusion that european - level supervision is going to spell the end of national supervision. in the entire euro area there are about 3, 400 banks, of which only 123 are directly supervised by the ecb – the rest remain the responsibility of national supervisors. in germany, for instance, about 1, 800 credit institutions are still being supervised by the bundesbank and bafin. nevertheless, the ecb will certainly play a part in harmonising the supervisory approaches to all banks in the euro area. consequently, national supervisors will have to take a more european perspective in supervising those banks which remain within their direct sphere of responsibility. bis central bankers ’ speeches but what about those banks which are directly supervised by the ecb? are national supervisors being pushed to the sidelines in these cases? well, let us consider the facts. the ecb has to supervise 123, mostly very large and complex banking groups, which are located in 19 different countries. to do so, the ecb has a staff of 1, 000, most of whom are located in frankfurt. there is no other option for european banking supervision than to rely on national supervisors. the role of national supervisors builds on their expertise and experience, as well as their resources and their presence on the ground. the bundesbank, for instance, has decades of

mr. tietmeyer addresses the topic of the eurosystem ’ s approach to monetary stability address by the president of the deutsche bundesbank, prof. dr dr h. c. mult. hans tietmeyer to the swedish economic association in stockholm on april 12, 1999. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ i at the beginning of this year, the euro was launched as a common currency in eleven of the 15 member states of the european union. as you all know, germany was one of those countries whereas sweden, by its own choice, was not. but i am hopeful that this state of affairs - as far as sweden is concerned - will not persist for too long. as the president of the deutsche bundesbank and a member of the governing council of the ecb, i have been following the recent debate in your country on the merits and drawbacks of joining the euro area with particular interest. i hope you will therefore allow me to take advantage of your invitation to argue in favour of the eurosystem ’ s approach to the attainment of lasting price stability which contributes to an environment conducive to lasting growth. i realise that this will not be an easy task in a country whose central bank is now reaping the fruits of many years of efforts to achieve price stability. the sveriges riksbank has recently actually lowered its repo rate slightly below that of the eurosystem - thus creating a situation which the eurosystem, of course, could not leave unchanged. of course, this was not the only reason for our somewhat surprising decision last thursday. there were other reasons, too. i will come back to them later. in retrospect, in the eyes of the central banks involved, the merging to form a common, larger monetary area went beyond a mere geographical reorientation of monetary policy. it is true that, in the run - up to monetary union ( and bolstered by the maastricht treaty ), there had already been a large measure of convergence in monetary policy thinking in europe. that primarily affected the ultimate goal of monetary