of a lead supervisor for all of the group ’ s subsidiaries and branches as well as in all subsectors of ongoing supervision throughout europe. large european banks have repeatedly advocated this model recently. from the point of view of regulators, however, there are some implications that need to be borne in mind. • supervisors in the host countries of cross - border banking groups would sacrifice much of their competency and sovereignty, even though these banks are systemically relevant in their respective markets. this primarily affects the new eu member states. • “ level playing field ” issues would arise if large banks supervised by the home - country supervisor – for example, in the reference market – were governed by rules which differ from those applying to banks that are not active across borders. on the issue of a “ centralised european supervisory authority ” 2 : this would be predicated on the existence of a number of conditions in order to enable effective and efficient supervisory activity. the most important – and especially problematic – aspects include • creating the conditions under european law to establish a centralised european supervisor, including amending the ec treaties ; • creating a single material supervisory ( procedural ) law ; • the absence of uniform insolvency legislation in the eu ; • the issue of creating a “ two - class society ” of financial institutions regulated by a european supervisor and those which are regulated by national supervisors yet simultaneously active in the same market. we must not forget the far - reaching political implications, either. after all, national supervisors in europe would have to hand over a large chunk of their political sovereignty. this also raises the issue of the democratic legitimacy of such a centralised structure. i believe that, so far, there has been too little or no discussion at all, of these aspects, which at the end of the day affect the question of a political union of european countries. here, politicians have to achieve results before banking supervisors can work on designing a european supervisory framework. iv while talking about work in cebs, i mentioned the concept of “ mediation ”. this procedure originated in the securities field ; in certain cases, mediation is governed by directives. the market abuse directive, for instance, envisages mediation by the “ committee of european securities regulators ( cesr ) ” in the event that, in a case of suspected cross - border market manipulation, one of the responsible securities supervisors refuses to turn over the necessary information. mifid calls for using mediation in disputes concerning determining the most liquid market for a given financial instrument

on these countries. conversely, lending to households and corporations becomes more attractive, spelling an improved credit supply in certain countries. as it could become more expensive for countries to borrow funds, there is considerable resistance at international level to abolishing this preferential treatment. however, the topic is bis central bankers ’ speeches now on the agenda of the relevant committees, and my colleagues and i will not let up in the fight for change. 4. conclusion ladies and gentlemen i do not wish to take up too much of your time, so i shall refrain from going into further detail. my aim is merely to demonstrate that centralisation is not the only route to a stable monetary union. the union can also be stabilised with a decentralised structure, as long as the conditions are right. and until member states are prepared to surrender sovereignty in return for improved risk sharing, this is also the better route. incidentally, strengthening the maastricht framework would also relieve the strain on eurosystem central banks, which all too often had to take on the role of “ sweeper ” during the crisis. in the world of football, the position of sweeper has been outdated since back in the days of franz beckenbauer, and the emergence of the defensive back four has made it quite a rarity indeed. let us do the same, then, for monetary union ; let us replace the sweeper with a strong line of defence : a strengthened maastricht framework. thank you for your attention. bis central bankers ’ speeches