addressed by introducing a country - specific medium - term budgetary objective, which involves a cap on growth of public expenditure that is in line with the medium - term rate of growth. the fiscal compact will also accelerate the excessive deficit procedure by introducing sanctions when the debt and deficit to gdp ratios are excessive. concerning the second issue ( the enhancement of competitiveness ), an excessive imbalances procedure seeks to identify and correct macro - imbalances and shortfalls in competitiveness. preventive recommendations will be made to member countries at an early stage in the formation of imbalances. on the financial stability side, european authorities have strengthened the financial sector surveillance framework. the european system of financial supervisors, which also includes the european systemic risk board ( the esrb ), is a new supervisory architecture requiring the national supervisory authorities to cooperate with the european supervisory authorities in the identification and analysis of systemic risks. the objective of the esrb is to address one of the most important weaknesses identified during the financial crisis, as highlighted by the de larosiere report – the lack of an adequate pan - european monitoring, assessment and mitigation of systemic risk. in line with the esrb recommendation to enhance macro - prudential governance in each member state, in the case of malta, it is the intention to replace the current standing committee by a joint committee on financial stability. this committee, which will include representatives from the central bank of malta and the malta financial services authority, would be mandated to monitor and assess risks to financial stability. its objective is to formulate policy recommendations to the boards of the two institutions, designed to safeguard financial stability, strengthen resilience of the financial system and minimise systemic risk. the recently announced changes to the depositor compensation scheme are a welcome change and help increase the resilience of the domestic banking sector. they are also in line with the recommendations of the latest imf report. bis central bankers ’ speeches given the importance of addressing the risks stemming from systemically important financial institutions, it is necessary for regulators to reduce and if possible eliminate the prospect that a systemically important financial institution would find itself in difficulties in the first place. this consideration also brings up the need of supervising better shadow banking, 5 which consists of those parts of the financial system that are not visible to regulators and hence not under their direct control and supervision. 6 basle iii goes a significant way in narrowing the gaps in regulation that result from recourse to shadow banking. 7 it does so

john hurley : the €15 silver mestrovic coin speech by mr john hurley, governor of the central bank and financial services authority of ireland, at the launch of the €15 silver mestrovic coin, dublin, 12 february 2007. * * * your excellency, ladies and gentlemen, i would like to welcome you here today to the launch of this coin bearing the design prepared so long ago by ivan mestrovic. it is hard to believe that it was eighty years ago. ivan mestroviæ was a sculptor, an architect, a writer and a participant in important political events of his day. he studied at the vienna academy of art in the early nineteen hundreds at the height of the vienna secession movement. he was awarded the grand prix for sculpture at the 1911 world exhibition in rome. and from 1923 to 1942, mestroviæ was dean of the zagreb academy of arts. a committee was set up in 1926, chaired by the irish poet and nobel prize winner, william butler yeats, to recommend designs for the coinage of the new irish state. ivan mestroviæ was one of the internationally renowned artists approached to put forward designs. as a result of communication problems, however, it was ultimately not possible to include his work in the process. nonetheless, it is very interesting to see what was thought about his design at that time. w. b. yeats himself called it ‘ one magnificent design ’. thomas bodkin, at that time a governor of the irish national gallery, described it as ‘ a superb design ’. the official report of the committee referred to it as ‘ a magnificent piece of work ’ and recommended to the government that an alternative use for it be found. over the years, many possibilities were examined. and for more than forty years, it has been the design on the seal of the central bank of ireland, which you can see displayed here. for my years here as the governor of the central bank and financial services authority of ireland i have been familiar with this excellent work. it is now a particular pleasure for me to see the design, which was intended for use on a coin, at last finding its true home. and what a beautiful coin it makes. i think that great credit is due to the croatian monetary institute on the excellence of their work. the end result they have achieved fully validates the comments made originally in 1927 and, in my view, does full justice to the excellence of ivan