benoit coeure : monetary policy and banking supervision speech by mr benoit coeure, member of the executive board of the european central bank, at the symposium on “ central banking – where are we headed? ”, in honor of stefan gerlach ’ s contributions to the institute for monetary and financial stability ( imfs ), organized by the imfs and the house of finance, frankfurt am main, 7 february 2013. * * * i wish to thank philipp hartmann for his key contribution to this speech. i remain solely responsible for the opinions contained herein. the history of central banks and the european banking union when we look at the history of central banks, contributing to financial stability was one of their roles in most countries, although to varying degrees. 1 even when central banks were assigned a relatively narrow mandate, such as that of inflation targeting in recent years, they often played a decisive part as soon as financial instability struck. in particular, their ability to act as lender of last resort in the financial system and to manage liquidity in the interbank market typically made them a key player in crisis management. even in normal times, the central role of bank deposits in the stock of money makes monetary stability dependent on the soundness of the banking sector. in sum, in the late tommaso padoa - schioppa ’ s words, financial stability has been part of the “ genetic code ” of central banks. 2 there have been many cases of lender - of - last - resort interventions by central banks during the present crisis. for example, when we compare the total emergency liquidity assistance ( ela ) that euro area national central banks granted to individual credit institutions last summer with the overall amount of liquidity provided at the same time by the eurosystem, we can see that the total ela amounts to almost one - seventh. just to quote an example from here in germany : the bundesbank granted €35 billion of emergency liquidity assistance to the ailing bank hypo real estate. 3 more generally, the experience of the last five years has underlined the importance of central banks in financial stability, a task which they have historically performed. but central banks were not always and everywhere tasked with financial supervision, which aims to prevent crises from happening in the first place. for example, before the present crisis the institutions responsible for banking supervision differed from country to country. 4 in fact, in the late 1990s there was a trend for financial supervision to be placed

it has proven its effectiveness in resolving difficult matters in a swift and efficient manner, keeping in mind the common goal of ensuring the timely and successful launch of t2s. in the past few weeks the commitment of those forming the t2s governance structure has become apparent once more. you might have heard some rumours that the t2s platform was not stable enough to go live. however, the reality is that the platform has been declared stable and ready to go live both by the t2s board in charge of steering the project and by the central securities depositories in the steering body ( the t2s csd steering group ). we are conscious that t2s will have an immense impact on the financial market and it is of key importance for us that the migration goes smoothly. after assessing the status of the platform – its stability and readiness for production mode – i can assure you that it is ready for the migration and launch this coming weekend. however, going live requires more than just the eurosystem being ready ; we also need the migrating communities to be ready. the first t2s migration wave was to include five securities depositories and their communities : bank of greece securities settlement system ( bogs ), depozitarul central ( romania ), malta stock exchange, monte titoli ( italy ) and six sis ( switzerland ). four out of those five markets, namely greece, malta, romania and switzerland, have confirmed their readiness to migrate as scheduled on 22 june 2015. as far as the italian market is concerned, a solution has been put forward which has eased the strong discomfort that has recently been signalled by the italian banks regarding migration on 22 june 2015. following a formal request by monte titoli, the italian securities depository, it and its community will be given an extended period of testing and will migrate only on 31 august bis central bankers ’ speeches 2015. this solution will not only help the italian market, but will also ensure that difficulties in one market cannot spill over to other markets and have implications for the financial market as a whole. this proposal has been discussed within the governance structure and is supported by the remaining securities depositories joining t2s. a detailed activity plan is now being developed for the migration of the italian market on 31 august 2015 and the possible impact on the scheduled activities for the subsequent migration waves is being assessed. this solution for the migration of the italian market is due to be approved by the ecb ’ s governing council tomorrow. harmon