of banking supervision in europe already covers different countries and various sectors of the financial system. so far, cooperation has proved both worthwhile and efficient. any future form of cooperation in the field of financial sector supervision should make use of central banks ’ know - how in banking supervision and financial markets. all institutions involved - the finance ministries, the supervisory authorities and central banks - should contribute to possible new committees or fora. iv ladies and gentlemen a thorough discussion about instruments and the framework of international financial organisations demands an atmosphere free of short - term political pressure. this a prerequisite for sensible and sustainable crisis solutions. the discussion today is taking place in precisely such an environment : the american council on germany and the deutsche bundesbank are providing an opportunity to discuss current issues of the international financial architecture in a calm and rational setting. we have invited a number of experts in the field of international financial architecture. and, indeed, it is a pleasure for us to welcome all of you. thank you for coming. the conference starts with the keynote address by the vice president of the bundesbank jurgen stark. afterwards, the discussion is structured in three panels. we will start with an outlook for the world economy and its interaction with exchange rate developments. otmar issing, member of the executive board of the european central bank, will chair this panel. on this basis we can exchange views about the roles of the public sector and the private sector in the resolution and prevention of international debt crises. the governor of the banque de france, jean - claude trichet, is chairperson of panel b. finally, we shall deal with the lessons of recent financial crises and the way forward. professor allen meltzer will lead the discussion in this panel. thank you again for coming and taking part in this conference. many thanks to the panelists. i wish you a discussion which, hopefully, will lead to a better understanding of financial crises and possibly to more efficient measures to handle them.

is the supervised institutions that bear full responsibility for any risks arising from cooperation with an external service provider. examples of such risks are a potential default by the external service provider, or the possibility of reputational risk. the institutions must ensure that the risks remain manageable – for instance, by including relevant terms and conditions to this effect in cooperation agreements and by considering from the outset how they can keep their business up and running if the partnership is terminated unexpectedly. so this sums up the conditions de jure. but are they always appropriate to the economic conditions? depending on the individual case, the picture can be very different. where credit institutions work with large technology firms, such firms ’ negotiating power might be so large, for instance, that institutions have difficulty effectively imposing their conditions on their contracting partners for the service being provided. you might call this “ the tail wagging the dog ”. 4 / 6 bis central bankers'speeches we also have to make sure that it does not make sense to outsource certain tasks simply because you can afford to be more relaxed about dealing with the resulting risks outside the regulated enterprise. the more the boundaries between sectors are blurred and the more intensively banks work with non - licensed enterprises, the more relevant discussions like this will become. my personal view is that we should discuss to what extent we might take a closer look at supervising individual activities – activity - based supervision – in addition to entity - based supervision. i am thinking here, for instance, about services provided by insourcers of a certain size and importance, such as cloud service providers. however, this would have significant repercussions – not least for supervisors. so that ’ s why it ’ s crucial that the debate does not take place in a vacuum, but always with a view to what is necessary and essential in order to tackle the key risks effectively. we are still in the early stages of this debate. in any case, the entity - based supervisory approach should remain unaffected. we cannot start to define areas where an institution is relieved of its responsibility for risks that ultimately affect its own services. this would pose a problem not just from the point of view of effective supervision, but also in regulatory terms. i also see a european dimension here. europe is already pressing ahead with regulation for issues emerging as a result of digitalisation. i am thinking, for example, of the eba ’ s recently issued guidelines on outsourcing arrangements. the bundesbank and bafin helped to draft these