of warnings and recommendations addressed to the supervisory authorities. in cases where recommendations are addressed to national supervisory authorities, the esas will play an advisory or contributing role. concluding remarks the proposed new supervisory framework represents a great step forward. the european commission ’ s proposals to enhance the eu ’ s financial architecture are aimed in precisely the right direction. i strongly encourage that a political agreement is reached by the end of the year. the new setup will provide a decisive contribution to financial stability in the eu. to that end, the central banks stand ready to provide the envisaged support to the european systemic risk board, just as i am sure the national supervisory authorities will be fully supportive of the european supervisory authorities. the smooth cooperation and exchange of information between the esrb and the esas will foster the effectiveness and thus the credibility of the new framework. this is a challenging time for all the institutions involved. i wish the ceiops all the best for today ’ s conference and every success for the establishment of its successor, which will represent a quantum leap in the european union ’ s supervisory architecture.

outlook. although there are few solvency concerns facing the industry, there is no room for complacency in this environment. insurers will have to be mindful of having sufficient capital buffers in place. the role of insurance companies and pension funds for financial stability let me take a step back and consider the role of insurance companies and pension funds in financial stability. in the continuing debate about categories of financial institutions, a distinction is sometimes made between “ systemically important ” institutions and “ large and interconnected but not systemically important ” institutions. in my view, large insurance companies and pension funds belong in the first category. they play an important role for the stability of the financial system. traditionally, insurers and pension funds have not generally been seen as being a significant potential source of systemic risk. the insurance and pension fund sectors are mostly regarded as relatively stable segments of the financial system. they are not seen as interlinked to the same extent as banks are, for example, in interbank markets and payment systems. but the interaction between insurers and pension funds, financial markets, banks and other financial intermediaries has been growing considerably over time. today, therefore, this traditional view needs to be challenged. i would like to mention three main reasons why insurance companies and pension funds can be important for systemic financial stability : their size, their interconnectedness and the economic function of insurance. let me talk first about size. insurers and pension funds are very large investors in financial markets. the growing role of fully - funded pension systems worldwide will increase this trend. collectively within the euro area, their investment amounted to €6 trillion at the end june 2009. most of the time, given the typically long - term investment horizons of insurers and pension funds, they are a source of stability for financial markets. however, due to the sheer size of their investment portfolios, reallocations of funds or the unwinding of positions by these institutions have the potential to move markets. in extreme cases, that could put at risk financial stability by triggering large swings in asset prices. second, interconnectedness : insurers and pension funds have strong and important links with banks and with other financial institutions. euro area insurance companies and pension funds hold about €435 billion of debt securities issued by euro area banks. this represents about 10 % of the total amount outstanding of debt securities issued by euro area banks. from a financial stability perspective, we need to