a number of documents on how to coordinate in a crisis now in place. but i think that we could go further in the direction of setting up minimum requirements for a crisis resolution framework for banks and other institutions covered by the financial safety net. here one can draw some parallels to the work on fiscal policy frameworks, where the eu has come a long way in terms of coordination and codes of conduct in the event of macroeconomic crises. where do we go from here? it is time to sum up. my message is that it is important for us to get in place an efficient regulatory framework for weak banks. a framework which combines the need to maintain stability and minimise costs to the public sector in the short term with the requirement for long - term market discipline. returning to the health - care metaphor i started out with, we need to be able first of all to deal with the ordinary flus and broken bones of the financial system. but we also need to be prepared to deal with a more serious event. a possible outbreak of avian flu in the financial system. i have tried to outline the broad lines of such a framework. in short, the following is needed : • an insolvency regime which ensures that banks can be effectively closed at a low cost to the deposit guarantee system • an effective depositor protection with a quick pay - out to depositors and a credible financing • the ability to take special measures, such as guarantees, to avoid the failure of a bank threatening the financial system in its entirety • a broad tool box to be able to enforce, also in those exceptional cases, the principle that the state will not bear the losses of shareholders and creditors, where it should be possible to tie conditions to any guarantee issued and with the option of temporary nationalisation as a last resort. but drawing up a broad structure is perhaps the easiest part. after that, it is necessary to find a concrete legal framework. in the end, this responsibility falls on our governments. a few countries seem to have much of this in place already. and some have come quite far in this work and devote quite a lot of resources to the project. those that have not i think are well advised to get started. it is just never a good idea to set up the fire brigade first when the city is on fire. but it is a delicate task trying to find an efficient and legally secure system which will also work cross border. i therefore see an important role for you who are lawyers specialising in

and selling the assets is to convert the bank into a public limited company. we saw some examples of this, too, in the swedish crisis, where some savings banks and other cooperative financial institutions had to be restructured. accounting issues need to be sorted out when one gets to the point where the government takes control, there are also more practical problems to deal with. this is a stage where the assets must be inventoried and where bad loans may need to be transferred to special asset management companies. one important aspect with regard to the feasibility of a quick and efficient solution is therefore the existence of clear regulations for evaluating assets and liabilities in a situation where the government intervenes. one particular question is how to deal with a situation where the government provides support for existing operations, for instance by injecting capital or providing a guarantee. the purpose of the intervention is to save the functions and not the bank as such. however, this action can have a positive effect on the value of the bank. in principle, it is reasonable that the value should reflect the value of the operations without reference to potential government support measures. additional legal issues so if all this has been put in place, is one home and dry? at the national level, yes. on condition of course that a number of basic conditions are met. the most fundamental requirement is that there is an effective legal system. it is not possible to close one ’ s eyes to the corruption in the legal apparatus in some countries, making it almost impossible to establish that a bank has gone bankrupt in such countries. if this is the case, the type of insolvency framework has little importance. the importance of reliable property rights and registers and the possibility to seize collateral cannot be emphasised strongly enough. finally, it is of course also important that the financial supervisory authorities dare to take difficult decisions. the people who work with these issues should therefore have sufficient legal protection. international contagion effects and the need for a code of conduct the international dimension has become more and more important. the financial systems are interlinked and there is a considerable risk of contagion effects. many banks are also a part of international groups with a more direct financial link between parts of the group. all of this of course creates a need to discuss how to manage banks in distress at an international level. the eu, with a single market for financial services and common regulations, has good reason to go further. much has been done in the area of coordination, with