importance of hedge funds and private equity firms and the establishment of off - balance - sheet vehicles, such as conduits, are cases in point. at the end of the day, a significant share of financial market activities was outside the focus of regulators and supervisors. this leads me directly to another issue with regard to supervision and financial stability. in my view, the constant and rapid development of new financial instruments, valuation models or legal structures poses a particular challenge to financial authorities. what we need is a speedy transfer of insights gained in international financial markets into our supervisory work. and this is one of the many reasons why central banks should be involved in supervision. the current turmoil has clearly demonstrated how important the interaction between central banks and supervisors is. thanks to its direct contact with market participants, the bundesbank has access to important details that are essential for the assessment of financial market turbulence and its impact on the german financial system. furthermore, such information is of key importance for central banks ’ responses to disturbances in the financial market, as we have seen with regard to the liquidity provision of the eurosystem in the money market. v statistics last but not least, i ’ d like to mention another factor that might increase financial transparency and thus help to reduce, at least indirectly, the risk of future financial turbulences, and that is closing some statistical gaps. an important aspect that is currently being considered by eurosystem statisticians is how credit risk transfer by banks could be covered statistically. this could include both data on the traditional “ true sale ” and synthetic securitisation operations as well as on transactions in credit derivatives. some additional insight might also come from more data on the so - called financial vehicle corporations issuing asset - backed and other securities in the process of securitisation. collecting data on such entities is currently under discussion in the eurosystem. moreover, it is essential to gather more information on the holders of financial assets. the bundesbank has initiated a security - by - security data collection on the holdings of the various sectors, as is also practised in some other countries of the euro area. the centralised securities database that is being developed in the escb – and that will be presented at this conference – could bring us a step forward in these endeavours at the european level. vi conclusions to sum up, let me emphasise six points. first, the current financial turbulence has revealed weaknesses in the originate - to - distribute model. it needs careful handling

the safety and integrity of payments systems, because they provide the infrastructure for transferring money in the economy. public confidence in the payments system is a closely related concern. as i noted earlier, confidence in the integrity of our basic paper payment instruments and payments systems was built up over a very long period of time. it is not surprising that society has, at times, been cautious in adopting new payment ideas. attitudes toward payments systems are often closely linked to attitudes about money, since such systems are the means of transferring money to meet a wide range of obligations. if payments systems do not work well, that can have serious consequences for the wealth, plans, and reputations of many individuals and businesses. in this context, it seems highly likely that prudent users will require new systems to earn confidence with strong evidence that these systems will meet their needs in both normal and exceptional circumstances. as we have seen, the process of building confidence can take years, and most suppliers realize that confidence is an asset to be guarded vigorously. recently payments systems have faced a number of challenges in the area of risk and risk management. for example, as payments systems such as the ach have been more widely used to make payments over the telephone and the internet, fraudulent transactions have reportedly increased. recent initiatives have apparently improved the situation, but the financial industry has continued to express concerns about fraud and the need to address it. i trust that all conference participants will focus on appropriate future risk designs and riskmanagement practices. while the risk designs of some large - value payments systems have changed significantly over the past few years, the risk designs for core retail payments systems have changed less. indeed, some of these designs continue to be based on concepts dating back to the 1970s. limited change may be the appropriate response. however, past designs and strategies should not themselves become barriers to the development of future payments systems that are more aligned with new forms of commerce and technology. another important issue in the post - september 11 environment is the degree of resilience of not only our large - value payments systems but also our retail systems. today, the mix of paper and electronic payment options helps mitigate the risk of disruptions to retail payments in the event of terrorist attacks, power blackouts, telecommunications disruptions, or similar infrastructure problems. as the united states increasingly relies on electronic payments for retail transactions, however, the financial system will increasingly need to ensure confidence in the resilience of these systems in a variety of adverse circumstances. as always