##udential requirements related to the interplay between banks and hedge funds. this could create the potential for an asymmetry leading to distorted regulatory incentives. second, also on the basis of the fsb analysis, we need to look with new eyes at the eu regulatory framework and ask ourselves whether it can properly address systemic risks stemming from shadow banking. in the past, regulation was sectoral - based, without specific consideration of the interconnections existing in reality between financial sectors. in this context, i welcome the commission ’ s green paper, which contains a very helpful preliminary analysis on whether the regulatory initiatives undertaken so far in europe are addressing such new perspective. it also indicates outstanding policy issues on which further regulatory initiatives might be needed. the green paper is also referring to the need for europe to establish a permanent process for the collection and exchange of information by all relevant authorities to address shadow banking entities and activities. in this regard, i note that the esrb, as the eu macroprudential body with authority over the whole eu financial sector, is well placed to conduct a continuous monitoring of systemic risks stemming from shadow banking. iii. policy issues concerning securities financing : the ecb ’ s views i would like now to focus on the repo market, which is of particular importance for central banks. the repo market is a key source of financing for the banking sector and the shadow banking system. most recent estimates of the size of the repo market in the us are in the range of usd 12 trillions in early 2010. 3 there are no official data on the overall size of the repo market in the euro area, but according to the latest december icma survey, the total value of outstanding repos on the book of the 64 offices of 59 financial groups in the eu in december 2011 was of eur 6. 2 trillion in gross terms. secured lending via repos has been increasing significantly in the past recent years in detriment of unsecured forms of interbank lending in money markets. indeed, we estimate that since 2002 the daily turnover of the interbank secured lending more than doubled whereas the unsecured part of that marked decreased slightly. secured financing provides benefits over unsecured lending, especially during turbulent market times. at the same time, however, the reliance on secured financing provides a powerful channel of transmission of shocks in the financial system. the decline in collateral values translates in additional collateral calls possibly compounded with higher haircuts and margins requirements. a

a solution to be possible, however, it would be required the support of the european commission by taking the necessary legislative initiative for the creation of a basic reporting underlying securities include u. s. government, federal agency, government sponsored enterprise, mortgage - backed, and corporate securities. bis central bankers ’ speeches framework at the eu level for market infrastructures. this would aim at ensuring that the data gathering would provide a complete and uniform picture of the euro repo market, while also safeguarding any legal and confidentiality requirements regarding the use of the data. the market would also benefit from this solution : reporting infrastructures would have to set - up procedure to retrieve and transmit the data, but they may offer an additional service to their participants given the economic value of information. ultimately, not only authorities, but market participants and the financial markets more widely would benefit from the general increased transparency on the euro repo market. vi. conclusions this conference today by the commission is a crucial moment in setting the stage for some key policy decisions in order to avoid financial stability risks stemming from shadow banking. in my view, among the list of actions to be considered, the establishment of a set of timely data concerning the repo market would be of key importance for supervisors, central banks and market participants. in order to make a first step, i propose the preparation of a detailed feasibility study for the repo market database in cooperation with the european commission. i hope that the preliminary considerations i developed today will foster further reflections and timely actions. thank you for your attention. bis central bankers ’ speeches