cost to the taxpayer who remains national. this requires rapid decision - making and quick implementation of remedial actions. outside observers assert that the operation of large committees and reliance on consensus may slow decision - making while financial innovation keeps accelerating ; disparate current national practices hinder integration and competition, as well as increase the regulatory burden ; the complexity of regulations and arrangements risks favoring national interests and limiting the exchange of information among supervisors. as the current crisis shows, the outside observer ’ s view might however be clouded by his prejudice. at political level, decision making in europe was nimble and decisive at all levels – eurogroup, ecofin, euro area summit, european union summit, european commission and european parliament – within a short time frame. they delivered a more powerful and clearer message in shorter time than other constituencies. the same goes for the monetary policy level. the decentralized operational modus operandi of the eurosystem was no hinderness to swift adjustment. during the last month, the governing council had 13 non physical decision - making gatherings, outside its 2 physical meetings in frankfurt, in order to take several dozens of decisions, all implemented since. overcentralization is no panacea for optimal decision - making as it might hamper collegial wisdom and creative thinking. each eu member state has to be concerned by the soundness of financial institutions in other member states. in this respect, the decision to include a european mandate for national supervisors could increase the speed of decisiontaking, reduce the regulatory burden and favor eu integration. the main lesson from the current crisis is that eu financial stability benefits from a commonly shared philosophy. this commonly shared philosophy appears in europe in the area of government intervention. the increased need for cross - border cooperation was initiated in a first memorandum of understanding in 2005 and has been reinforced with a memorandum of understanding signed by all treasuries, supervisors and central banks during last summer, to be implemented by the end of the year. a sense of urgency is instilled in the task of developing a stability framework with an explicit ex - ante, eu - wide, crisis prevention mechanism that increases confidence among national authorities that necessary actions will be taken ; that information will flow ; that there will be adequate representation of their interests in decision10 making and implementation ; and that authorities at all levels ( i. e., eu, national, institutional ) will be accountable for the stability aspects they control. this memorandum of understanding covers crisis prevention,

regarding financial institutions, their next generation models of risk management will have to incorporate the non - linearities and discontinuities of modern financial markets. we may have already moved toward some form of a new international monetary framework. to conclude this section, i remark that the wide range of coordinated responses to the crisis that we are witnessing, a characteristic feature of which has been the predominant role played by central banks, has perhaps sawn the seeds of a global monetary framework. i think of massive recapitalizations of systemically - large institutions and crossborder financial firms and the boosting of deposit insurance limits. at monetary policy level we have witnessed not only concerted action in lowering the policy rate but also narrowing the policy corridor and through asset swaps, provision of cross - border liquidity in us $ and € in unlimited amounts as well as a lengthening of the term funding. this coordination has been accompanied by the enlargement of counterparties either directly or indirectly and we have also seen a broadening of eligible collateral. this new emerging monetary policy framework adjusted in emergency times was required by large cross - border and globalized financial institutions and products. the more flexible and diversified framework of the ecb has, in this respect, proven its benchmark capacity in times of duress even if itself has been enhanced since. the world has moved toward a much more significant coordinated role of central banks in preserving world financial stability. after the times of duress we are living, it is likely that this de facto framework might evolve toward a more institutionalized set with some ingredients of a world system of information sharing, with world collateral and world monetary policy. from a system of national regulators and supervisors to an eu stability framework financial stability frameworks in the eu are largely national. each country ’ s supervisory authorities drive their legitimacy from national parliaments, are subject to national accountability mechanisms, and are financed nationally. each country ’ s authority is these features of crises were already present in the case of continental illinois ( 1984 ), and more recently in the barings ’ crisis ( 1995 ) and ltcm collapse ( 1998 ). responsible for the consolidated supervision of financial institutions domiciled in that country for which it is the home supervisor. host supervisors are responsible for subsidiaries of institutions from other countries operating in their territories. national authorities are organized differently in the eu, e. g., as a single authority, or according to a sectoral model. their mandates also differ with some including financial stability,