in other words, we must ensure to safeguard integrity of microprudential tools and that we do not limit supervisors ’ ability to tackle risks. third, any proposal would need to be accompanied by proper governance arrangements within the ecb, respecting the separation principle between monetary policy and banking supervision and ensuring an adequate distribution of powers between the national and eu levels. as i just said, given that the cycle is maturing, i fear that now is not the time for an operationalised standalone macroprudential approach that implies new capital requirements not foreseen in eu law. conclusion ladies and gentlemen, a strong regulatory framework is vital if we want to have safe and sound banks ; this is an important lesson from the crisis. basel iii provides such a framework. and it is equally important that the regulatory framework is sufficiently harmonised across borders. this is relevant at the global level, but it is even more relevant in the euro area, as a foundation for the banking union. this calls for the basel standards to be implemented faithfully, including in the eu. fully implementing basel iii will have a positive effect on the economy in the long run. at the same time, we should not breach our promise of no further capital requirements on aggregate. doing so would undermine our efforts to implement basel iii. monetary policy incorporates financial stability, and microprudential supervision follows its own objective. macroprudential supervision should continue to contribute to deepening the analysis in 3 / 4 bis central bankers'speeches line with article 127 ( 5 ) of the treaty. rushing to operationalise it could be seen as a solution that is desperately looking for a problem. 1 the escb has a contributory role in the field of financial stability. see mersch, y. ( 2018 ), “ financial stability and the ecb ”, speech at the escb legal conference, frankfurt, 6 september. 4 / 4 bis central bankers'speeches

– once they have been implemented. to this end, we contribute to a number of working groups in both the financial stability board and the basel committee on banking supervision. we should not renege on the commitment to implement internationally agreed reforms. instead, we should focus on how regulators and banks can have a constructive dialogue within a basel - compliant framework. this dialogue has been ongoing for many years and will continue. and overall, we can see that capital requirements and buffers are levelling off, while supervisors are increasing their focus on specific risk areas in individual banks. stabilising the capital requirements is a reasonable objective asked for by banks, but we need to finalise the basel iii package first. from micro to macro ladies and gentlemen, so far i have focused on the microprudential side. is there a macroprudential side here, too? in the euro area the relevant authorities apply various microprudential measures to address institution - specific risks, as well as various macroprudential capital buffers or borrower - based measures to address systemic risks. the institutional setup and the distribution of competences are different from one country to another. the treaty does, however, not set out macroprudential supervision as a basic task of the ecb or the escb, nor does it establish financial stability as one of their specific goals1. with both the pooling of monetary sovereignty and the exclusive competence for prudential supervision at the ecb, how can member states steer the cycle at national level beyond fiscal and structural policies? furthermore, the costs of financial crises are mostly born at the national level and much less so at the european level. this seems to have been the rationale behind attributing macroprudential tools to the national level. that said, the ssm regulation stipulates that, if deemed necessary, the ecb may apply higher requirements for measures taken by national authorities, provided that these measures are set out in eu law and are intended to address systemic or macroprudential risk. in other words, the ecb can top up national measures under certain conditions. a case in point is the countercyclical capital buffer, or ccyb, which can be released in periods of stress, although this has never actually occurred. and here, some basic questions need to be asked. what and who trigger this release? the turning point in the financial cycle or the stress in the banking system? are we adding a new layer of