the euro area based on a separation of responsibilities is the most appropriate to ensure sustained and non - inflationary economic growth. 2. 2 more international monetary policy coordination? while cooperation in the field of liquidity management on an unprecedented scale has been certainly one of the hallmarks of public responses to the current turmoil, another example without precedents of central bank coordination was the decision by the ecb and five other see the article entitled “ ten years of the stability and growth pact ”, ecb monthly bulletin, october 2008. major central banks to ease global monetary conditions on 8 october 2008. commentators and observers have wondered whether this concerted policy decision may be the beginning of a new era of increased international monetary policy coordination in response to economic and financial globalisation. it is important to stress that this coordinated interest rate cut was taken in a specific context and with a specific objective. there was extraordinary uncertainty at the time about the economic outlook and strong evidence that upside risks to price stability had diminished at the global level. the coordinated cut addressed the need to respond to a common shock that was being transmitted around the globe almost simultaneously. through the joint communication, the international central banking community provided a signal of its strong commitment to responding to the macroeconomic implications of the financial market turmoil. there is no doubt that over the past three decades the trade, economic and financial linkages among the different regions of the work have grown tighter, and of course policymakers take this into account in the design of their policies. however, when talking about international policy coordination, it is important to define clearly what we mean. policy coordination does not mean, of course, that all central banks need to adopt the same policy stance for the entire world and certainly it cannot be a surrogate for domestic macroeconomic prudence nor weaken the commitment of each central bank to its institutional objective. indeed, differences in cyclical positions, structures of the economies ( e. g. in terms of market rigidities and frictions, sectoral leverage, financial systems, etc. ), monetary policy institutional frameworks as well as shocks hitting the economy almost necessarily lead to differences in deciding the appropriate monetary policy stance. thus, systematic monetary policy coordination may eventually come at the cost of weakening a central bank ’ s commitment to its institutional objective. for central banks, international policy coordination is better understood as the continuous cooperation and exchange of information at both staff and decision - making levels, shared experienced and mutual understanding and trust, which very much lies on the consensus among central

banks ’ bidding behaviour. overall, while the need for enhanced interaction between central banks and supervisory authorities is widely acknowledged, recent events have called into question whether improved interaction in cooperation suffices. in this context, the debate has recently turned towards the future supervisory architecture. in particular, the financial crisis has underscored the urgency of reviewing the eu supervisory framework, which is still based on national responsibilities against the background of increased financial market integration and the growing role of large cross - border financial institutions. in response to these concerns, a high level group was set up under the chairmanship of mr jacques de larosiere with the mandate to examine the allocation of tasks between the national and the european level. the final report of the group, published last february, includes a number of proposals to strengthen both macro - and micro - supervisory arrangements in europe. as regards the arrangements for macro - prudential supervision, the de larosiere report proposes to establish a european systemic risk board under the auspices of the ecb, which should substantially improve the assessment of systemic risks to financial stability at the eu level. by assigning a strong role to central banks, and particularly to the ecb, the report recognises that these institutions should play a leading role in macro - prudential supervision. however, in order for the new board to perform its tasks in an optimal manner, it is important that three key requirements are fulfilled : • first, the ecb must have timely access to all relevant information, including that concerning individual institutions ; • second, risk warnings from the new council should be translated into effective policy action ; • and third, the new council must have a solid institutional and legal basis in order to ensure independence and effectiveness of its decision - making processes. 3. concluding remarks the financial turmoil, which began in the summer of 2007, has developed over time into one of the most disruptive crises that the world has experienced in many decades. this is why from the start of the turmoil public authorities have undertaken interventions in key policy fields, including liquidity management, monetary policy and fiscal policy, which are unprecedented by number and scale. in addition, many initiatives have been undertaken to address weaknesses in the regulatory and supervisory framework in order to provide sounder foundations to our financial systems. despite our best efforts, we cannot yet see the light at the end of the tunnel and key financial markets and economic sectors remain under stress. it would be very difficult to predict when exactly our economies will return to normality,