2012, implementing ambitious standards covering every aspect of a ccp ’ s risk management framework. these principles are significantly tougher than those they replace and their consistent implementation across jurisdictions is currently being monitored. 2 i wish to thank pierre marmara for contributing to this speech. i remain solely responsible for the views expressed here. see cpmi - iosco, implementation monitoring of pfmis – level 1 assessment, august 2013 ; cpmi - iosco, first update to level 1 assessment report, may 2014 ; cpmi - iosco, implementation monitoring of the pfmis : level 2 assessment report for central counterparties and trade repositories ( european union, japan, united states ), february 2015. bis central bankers ’ speeches second, guidance on ccp recovery and resolution : in 2014, as a supplement to the pfmi, cpmi - iosco published comprehensive guidance on financial market infrastructure ( fmi ) recovery. 3 it considered the types of tools that ccps and other fmis can use to deal with severe financial problems that could threaten their existence. in addition, the fsb adopted a framework on fmi resolution. 4 third, specific treatment of banks ’ exposures to ccps : the bcbs has revised its previous basel ii capital framework, which applied a zero capital charge to banks ’ exposures to ccps, in order to better capture the risks stemming from the financial system ’ s increasing reliance on ccps. one of the main features of this revised framework is the preferential treatment given to exposures to qualifying ccps, i. e. ccps supervised in a manner consistent with the pfmi. finally, enhancing the understanding of ccp risks via increased transparency : in order to ensure ccps are providing participants with the necessary information to evaluate the risks linked to clearing, cpmi and iosco have published two disclosure frameworks. the disclosure framework and assessment methodology, 5 released in december 2012, and the public quantitative disclosure framework6 for ccps, released in february 2015, which require ccps to disclose information on topics such as the size of their credit risk, liquidity risk, collateral, margins, business risk, custody and investment risks. let me add that public disclosure requirements are particularly important for indirect members who, unlike direct members, do not play a direct role in the ccp ’ s risk governance. should authorities be doing more to address potential weaknesses in ccp risk management? as i just mentioned, the regulatory standards have been significantly strengthened

financial position ; realising sustainable convergence of long - term nominal interest rates ; and maintaining a stable exchange rate between the national currency and the euro. the treaty also requires that nominal convergence is sustainable. this is not possible without it being underpinned by a high degree of real convergence. according to this second dimension, adopting the euro makes sense only if the economic structure of a prospective member has converged sufficiently towards the prevailing structures in the euro area. the success of the real convergence process in turn depends on the sustainability of the relevant policies. the challenges that we have faced since 2010 highlight the dangers that large and persistent macroeconomic imbalances pose, not only for the stability of domestic economies, but also for the smooth functioning of the euro area as a whole. we all know the dire implications of prolonged losses of competitiveness, excessive indebtedness and housing market bubbles. recognising this fact, eu members have moved towards stronger surveillance of domestic policies. let me remind you of two examples. one is the new macroeconomic imbalance procedure, which aims to prevent the build - up of new macroeconomic imbalances and enforce the correction of existing imbalances. the other is the “ fiscal compact ”, which was signed by all eu members except the uk and the czech republic in march this year and which strengthens the sustainability and credibility of fiscal policies. bis central bankers ’ speeches the third dimension of convergence is institutional. the relevant national legislation, including the statute of the national central bank, needs to be compatible with the eu treaties and the statute of the european system of central banks ( escb ). more generally, a lesson we have learned the hard way is that the strength of the institutional environment is crucial for the sustainability of economic integration and convergence. improvements in the institutional environment entail, among other things, better regulations, better governance, better quality of statistics and a more business - friendly environment. removing impediments to the efficient use of factors of production helps to enhance the growth potential of each country. how to achieve a high degree of sustainable convergence? so how can countries best prepare their economies to reap the benefits of closer european integration? there are four building blocks : monetary policy, structural policy, fiscal policy and financial policy. let me reflect briefly on each of these. monetary policy first, monetary policy, which, before the euro is adopted, remains a national responsibility. but a number of treaty obligations already apply at this stage. in particular, the main