for specific national features. if the european legislator has left it up to the national legislator to transpose these options – as is the case in around 20 instances – and the national legislator has done so in the form of a law, the ssm must respect this. we have to apply national law, even if this might impair the level playing field. the situation is different when the european legislator has left the exercise of national options to the discretion of the supervisor, as has been done in around 80 cases. over the past few months, we have made a list of all the national options and will come to a decision as soon as possible as to where we stand on every single one them, whether we will exercise them and if so, how. the national supervisors will play an important role in this respect, as they are the ones that will have to explain the national features and the related risks to us. they are the ones who should complement our knowledge of national markets and market structures, of national legal systems and risk trends. and we know, as supervisors, that some of these options are the result not of specific market structures, but of the continued existence of old traditions and popular habits. ( 2 ) good supervision in europe requires knowledge and experience of individual national as well as european markets and market structures ; it requires knowledge and experience of national and european legal systems. knowledge should be consolidated and decisions taken centrally at the european level so that attention is focused on the european interest instead of on the solely national interest. the division of tasks within the ssm provides for just that. as i said, the ecb will take complete responsibility for the direct supervision of significant institutions. but national supervisors will bring their knowledge and experience to the supervisory teams and support the ecb in its supervision, and they will do so in line with a single supervisory approach. it is our aim at the ecb to have detailed knowledge of the business model and risk profile of each of the 120 directly supervised institutions. we want to be able to assess, at any time, the risk - bearing capacity, the internal control systems and the governance of banks, and to intervene at an early stage when we see danger. in short, we intend to supervise intensively. i have already spoken in detail about the division of labour with regard to the less significant institutions. in both areas, then, knowledge of national and bis central bankers ’ speeches european markets will be brought together with a single evaluation system, a single supervisory approach and a

government of india conference on advancing asia : investing for the future, new delhi, 12 march 2016. for a fuller discussion see cœure, b. ( 2014 ), “ policy coordination in a multipolar world ”, speech at the 5th annual cusco conference organised by the central reserve bank of peru and the reinventing bretton woods committee : “ 70 years after bretton woods : managing the interconnectedness of the world economy ”, cusco, 22 july 2014. see rey ( 2015 ), “ dilemma not trilemma : the global financial cycle and monetary policy independence ”, nber working papers, no. 21162 ; miranda - agrippino and rey ( 2015 ), ” world asset markets and the global financial cycle ”, nber working papers, no. 21722. bis central bankers ’ speeches there is also evidence that exchange rate regimes still matter. various recent studies support the traditional view that exchange rate flexibility affords at least some degree of insulation from global shocks. 12 another aspect is understanding the role of domestic policies more broadly in mitigating negative spillovers. a large body of empirical work in recent years has shown that fiscal, macro - prudential, regulatory and supervisory policies can help mitigate the adverse effects of foreign monetary policy on domestic financial stability. 13 indeed, the experience with the taper tantrum in 2013 showed how differences in domestic policy frameworks shaped how severely different economies were affected by financial spillovers. 14 in other words, it has become clearer since the crisis that the famous “ tinbergen principle ” which we apply at the domestic level also needs to be applied at the global level. policymakers need to have sufficient instruments to deliver on their objectives. and when they do have them, they must use them. the need for policy alignment the second implication of the global nature of low inflation is that there is a common responsibility for addressing its sources, whatever and wherever their origin. indeed, to the extent that the environment in which we operate is more affected by the global output gap, and the global savings - investment balance, the speed with which monetary policy can achieve domestic goals inevitably becomes more dependent on others – on the success of authorities in other jurisdictions to also close their domestic output gaps ; and on our collective ability to tackle the secular drivers of global saving and investment imbalances. in a recent speech in brussels i made a similar point regarding the interaction between monetary policy and other policies at the domestic level, such as