range - of - practice papers. in addition, in some cases, industry - led solutions may be the best approach. to respond to the accelerating pace of financial innovation and globalisation we need flexible frameworks. both the core principles and basel ii are examples of global standards that were developed for local application. both initiatives are flexible and responsive to innovation. for example, basel ii provides a menu of options to suit institutions with a range of complexity. moreover, the more advanced approaches are based on the modelling approaches developed by advanced banks – allowing regulatory and banking models to develop together. over the past ten years, we have observed significant changes in international capital flows, greater reliance on market funding in many jurisdictions, and banks becoming more active buyers and sellers of complex financial instruments. in light of the central role that banks play in providing liquidity, i believe that liquidity risk management is an area where it would be appropriate for the committee to do some exploratory work. i believe there is much that can be gained from sharing information on supervisory approaches to assessing liquidity, and bank tools for managing liquidity, particularly during stress scenarios. in this and all cases, i expect that the committee ’ s response will be proportionate to the risks identified, and that the policy tools that the committee employs will be designed to achieve the maximum benefit for the least cost. i also expect the committee will consult widely in the process of developing its views on the issues and then deliberating on possible responses. proactive outreach this brings me to the fourth element of the committee ’ s strategy, which is to engage in proactive outreach. this encompasses outreach to non - committee countries, to the industry and to other sectors. the committee ’ s dialogue with non - committee member countries is an extremely important element of its strategy. this stems from the need to promote the development of sound supervisory practices in developing markets and to accommodate the growing importance and sophistication of non - committee member banks, supervisors and markets. in addition, it is critical that we address home - host coordination issues that arise with the growth of cross - border banking. these trends, and the resulting need for dialogue, are quite clear when we look at the growing and changing financial landscape and the increasing trend towards market liberalisation in the asian region. as an indication of the importance the committee places on its outreach strategy, at its october meeting in merida the committee agreed to the establishment of the international liaison group ( ilg ). this group

general news 06 june 2023 general “ bold, but realistic : monetary policy and financial stability ” © dnb “ europe will not be made all at once, or according to a single plan. it will be built through concrete achievements which first create a de facto solidarity. this bold, but realistic quote from robert schuman, one of the founders of the european union, today, also guides monetary policy and financial stability. ” in his keynote speech at the 5th capital markets seminar, jointly organized by the european stability mechanism, the european investment bank and the european commission, klaas knot discussed the current state of economic and financial affairs. date : 6 june 2023 speaker : klaas knot location : the 5th annual capital markets seminar, luxembourg city good morning everyone. today is june 6th. a date of tremendous historical importance. the day that, exactly 79 years ago, marked the beginning of the end of the second world war. a day that you could see as the beginning of what we now know as the european union. one of the founders of our union was robert schuman. he was born just a stone ’ s throw from where we are today – right here, in luxembourg city. what a bold man. a bold, but realistic man. “ europe, ” he said, “ will not be made all at once, or according to a single plan. it will be built through concrete achievements which first create a de facto solidarity. ” and indeed, looking back, there was no single plan. but what we do see, when we look back, are concrete achievements. like our hosts today : the european commission, the european investment bank, and the european stability mechanism. and what we also see, when we look back, is de facto solidarity. between people, between countries, and in concrete achievements like next generation eu. the esm is one of the youngest achievements in this very incomplete list. a mere 14 years ago, at the height of the euro crisis, we did not have the esm. we did not have a european mechanism in place to deal with economic and financial stability issues. but many of you here today realised that we needed one. and it is testament to you, and all those involved, that the esm has become, in a very short time, a cornerstone institution of the european monetary union. during the sovereign debt crisis, it was directly involved in successfully restoring market access to multiple euro area member states. one quick look at today ’