at the euro area level, by adjusting it to national specificities and addressing idiosyncratic financial stability risks while maintaining the harmonious transmission of monetary policy across the euro area. second, macroprudential policy may help to fine tune the overall impact of monetary policy by ensuring that the risk - taking channel is not disproportionate in some specific sectors / countries, in order to prevent systemic risk. let me give you two examples of what we monitor very closely in france : the increase in commercial real estate prices in paris, and the rise in corporate debt. having said this, i do not mean that there is no hierarchy between the two objectives. i call for strong complementarity, not for a merging of objectives. to be more explicit, i consider that a monetary policy strategy that targeted asset prices would be a mistake. as central bankers, we need to avoid confusing economic agents ; our role is to anchor expectations and ensure business continuity. 4. – there are still challenges to be addressed to provide authorities with the necessary policy toolbox for financial stability for it to be more effective, we still face a number of challenges in order to achieve an optimal macroprudential regulatory framework. first, we have to complete the regulatory framework for banks, by finalising the basel iii reform : i strongly wish and hope that we can reach a fair and 3 / 4 bis central bankers'speeches reasonable agreement soon. a revision of the european macroprudential framework is currently underway at the european commission level. moreover, decisive progress should be made to better provide macroprudential authorities with policy tools properly designed to address financial risks beyond banking. market financing, shadow banking, fintechs, pension funds, financial innovations are all part of the scope of macroprudential policy, insofar as they have the potential to pose a financial risk to our economies. our next issue is less the solvency of banks than the liquidity of non - banks. it is also our duty to complete the european regulatory framework with the finalisation of the resolution mechanism to make the functioning of the banking sector smoother – in line with the spirit of the banking union, also enabling the capital market union ( cmu ) to bloom, within the holistic approach of the “ financing union for investment and innovation ” i have suggested. finally, we must ensure that the new regulatory framework is consistently implemented everywhere, and avoid any backtracking outside europe. financial stability is a global common good,

. and, conversely, changing the monetary stance, by moving policy rates, also may have an influence on financial stability. the relative strength of those influences is not empirically known. those of us who would use monetary policy with a financial stability objective implicitly assume that leverage and maturity transformation are very sensitive to interest rates. i am not sure this is true. at the very least, during the crisis, we have seen deleveraging proceeding at an accelerated pace, although interest rates have been brought down – and this is the reason why there has been a zero lower bound problem. i suspect that, symmetrically, interest rate hikes would have been powerless to stop the incredible build up in leverage prior to the crisis. this is the very reason why we need additional – macro prudential – tools to deal with financial instability. but this analysis also shows that macro prudential and monetary tools are not independent. so we have to give up the ideal vision of a world where two objectives – price and financial stability – would be pursued with two independent set of instruments. the bis central bankers ’ speeches reality is somehow messier and this has important consequences. operating two different policies with two sets of interacting instruments is definitely a challenge. once we move away from the pure “ tinbergen ” world, preserving the operational independence of monetary policy may require particular attention. add to this that mandates and accountability regimes are very different for price and financial stability. central banks are independent, but macro prudential authorities are not. in all major jurisdictions, governments, and parliaments, are deeply involved in the organization and management of macro prudential supervision. likewise, while price stability mandates are precisely defined and often quantified, financial stability mandates are specified in very broad terms. there are good reasons for this situation. in devising and implementing macro supervision, authorities are facing delicate trade - offs between efficiency and stability in the financial system. deep social choices are involved, which, arguably, can differ across countries and periods of time. also, as recent experience has shown, financial stability may ultimately involve fiscal commitments. finally, and most importantly in my view, we lack the analytical framework upon which both a financial stability mandate and operational independence could be validly and legitimately anchored. central bank independence has closely followed theoretical breakthroughs, in the 1970s, in our understanding of inflation dynamics. it was made possible because societies reached a common – and easily communicable – agreement on the lack of trade - offs