supervisory board, the decision - making body of european banking supervision. this organisational set - up will ensure that the bundesbank can contribute to european banking supervision in an effective and efficient manner. as for the banks falling under direct ecb responsibility, we can conclude that national supervisors nonetheless still have a major role to play. here, we have succeeded in striking a balance between harmonisation and subsidiarity. we still have some way to go as far as proportionality is concerned, however. in my view, we have to tailor supervisory processes to better suit the size of individual banks – and their joint supervisory teams, too, for that matter. the largest and smallest jsts differ quite substantially in size – the largest comprise around 70 full - time supervisors, the smallest just 5. past experience has shown that jst workloads often exceed capacities, particularly so for the smaller teams. so bearing this in mind, there are two lessons we can learn from the first six months of european banking supervision. first, the joint supervisory teams need to be of a sufficient size to be able to perform their supervisory duties in an effective manner. second, the size of a joint supervisory team should be proportionate to the size and significance of the supervised institution. in other words, we have to emphasise proportionality as a guiding principle in organising the jsts for differently sized banks. 4. supervising “ less significant institutions ” now, what about the other banks? what about banks that do not fall under direct ecb supervision? these less significant institutions, as they are known, or lsis for short, account for less than 15 % of the aggregate total assets of the euro area ’ s banking sector. in terms of quantity, however, they account for the bulk of the banking system. across the euro area, bis central bankers ’ speeches around 3, 400 institutions are classified as “ less significant ” ; 1, 700 of them are located in germany. and it is with regard to these institutions that harmonisation, subsidiarity and proportionality have to be balanced with particular care. as a general rule, lsis continue to be directly supervised by the national competent authorities, although the lsi sector as a whole will be overseen by the ecb in matters of risk concentration. furthermore, the ecb and the supervisors are currently developing joint standards for the supervision of these smaller banks. and again, harmonising standards up to a certain degree is a necessary and welcome measure. that said, it

to tighten up the ultra - loose monetary policy in good time. but no one can say at the moment when that will be. what steps have you taken off duty to protect your family from inflation? have you bought some gold? no, i have not bought any gold. besides, my investment options are deliberately restricted so as not to give the slightest appearance of any conflict of interests. that sounds reassuring. but the bundesbank is often accused of sowing disquiet with its alarmism. such an accusation is baseless. our positions are well argued, the german public is well informed, and it appreciates the bundesbank ’ s clear stance. in such an exceptional situation in which the ecb governing council is acting at the outer edge of its mandate, there is bound to be a plurality of views – we are not a politburo. politicians grumble about you all the same. a politician once said to me that the two camps on the ecb governing council are like mountain guides. and when they argue, they cause anxiety and disquiet in the whole climbing party. i answered that i find it strange that politicians, who should be leading the way and making the decisions, wish to file in behind us and be guided by us. and if they do want to do that, then it is probably better for the mountain guides to discuss their route through uncharted territory rather than deciding resolutely on a particular path which might lead to them into the abyss. bis central bankers ’ speeches