that authorities can quickly detect early signs of deterioration and intervene as soon as possible to reduce the probability and impact of a sifi failure. national supervisors should have the powers to apply differentiated supervisory requirements for institutions based on the risk they pose to the financial system. they should have the power to intervene effectively at an early stage, to mandate changes within an institution, to prevent unsound practices and ensure appropriate countermeasures including capital and liability restructuring. with regard to resolution powers, an effective resolution regime must provide authorities with the powers and tools to wind - down a firm quickly and safely, while ensuring the continued performance of essential financial functions and uninterrupted access of insured depositors to their funds in order to contain systemic risk. authorities must possess all the tools that facilitate “ gone concern ” restructuring and winddown measures, including the establishment of a temporary bridge bank to take over and continue operating critical functions. cross border perspective a second crucial aspect for an effective resolution mechanism regards cross - border multinationals. in the past three years, cross border issues have added a layer of complexity in dealing with bank crises. the international dimension of financial institutions increases the scope for cross - border contagion and thus the likelihood of a systemic crisis across countries. moreover, reaching rapid and clear agreements at cross border level proved to be, in some circumstances, a very complicated exercise. perhaps this should come as no surprise. to some extent, it is a direct consequence of the inconsistency between, on one hand, the size, complexity and interconnectedness of large banking groups – operating far beyond national boundaries – and, on the other hand, the enduring fragmentation of the national legal and regulatory frameworks. the basel committee recently published a report on cross border resolution, which contains a set of recommendations intended to strengthen national resolution powers and cross - border implementation. the report underlines, inter alia, the need to further converge on a common set of effective tools and improve information sharing in crisis management. the report addresses the issue of complex banking group structures and recommends using regulatory incentives when complexity could create an obstacle to an orderly and costeffective resolution ; capital or other prudential requirements should be designed to encourage organizational structures that facilitate effective resolution. the financial stability board is also working to remove obstacles that can obstruct the effective implementation of recovery and resolution measures in complex cross - border institutions. it has identified four technical areas that need to be addressed : i ) complexities arising when

hear, most of the time, “ european monetary union ” as an answer. actually, of course, it is “ economic and monetary union ”. from 1979 to 1983 tommaso was, as i recalled, director general for economic and financial affairs at the european commission. in that capacity he oversaw the initial operation of the ems and was certainly instrumental in paving the way to bis central bankers ’ speeches the actions that would lead to the single european act. 6 but he was persuaded, from the analytical perhaps even more than from the political standpoint, that “ the ems is not enough ”, and that the full implementation of the programme set out in the single european act would give rise to an “ inconsistent quartet ” in an area characterized by free trade, full capital mobility, fixed ( or managed ) exchange rates and national monetary policies. ( this thesis, without explicitly setting the condition of free trade, had already been set forth in the literature, as a dilemma or an impossible trinity, by robert triffin and others ). 7 i said “ from the analytical standpoint ”, but i might have also said “ architectural ”. i believe that tommaso ’ s ambition, and the founding role that he played in this process, from the initial ideas to the ( indirect ) negotiation of the details of the treaty articles and the actual establishment of the union, was exactly to create a proper institutional set - up for an idea of europe designed to improve the well - being of its citizens and ensure fruitful interaction with the rest of the world. at times, there is criticism of what can be seen as a “ technocratic ” approach to political union. but tommaso was well aware of what he called the ambiguity, in the development of europe, “ between a purely economic project and a political project, between confederation and federation, between a free - trade area and a single market, between technocracy and democracy, between jean monnet ’ s functionalism and altiero spinelli ’ s constitutionalism ”. 8 he understood very well the risk of a “ democratic deficit ” and the limitations of “ a currency without a state ”. 9 so tommaso padoa - schioppa has been widely identified as a ( if not the ) “ founding father of the new currency, ” “ architect of the euro ”. i believe that this is proper, but i wanted to emphasise that tommaso was also deeply convinced of a notion clearly expressed by james tobin, namely