to leave it to the accountants. future regulation of financial markets will significantly curtail too risky business behaviour. taking recent rises of financial market participants ’ risk aversion into account, a more stable financial system can thus be expected. banking in the future might be more boring and less sophisticated, however, it will be more sustainable. what we should refrain from is a ) creating new international institutions. instead we should promote essential improvements of cooperation among existing ones, and – if warranted – assign new tasks to them. b ) invest too much hope into crisis prevention by means of an institutionalised early warning system as its utility seems to be overestimated. as you know, there were plenty of warnings concerning unsustainably low levels of risk premiums, sent by central banks and other organisations, but these fell on deaf ears, c ) measures of protectionism. fortunately, the heads of state of the g 20 have declared that they will resist the temptation to protect their national economies at the expense of other nations. however, i hope that these are not just empty promises. central banks before i conclude, i would like to add some final remarks on central banks and their future role as to financial stability. central banks are affected in many ways by the current crisis. three issues are of major importance in this respect. firstly, in many countries, central banks are responsible for banking supervision and therefore concerned with the liquidity and solvency problems of individual financial institutions. even during a systemic crisis, the close connection between central banks and banking supervision has proven to be advantageous owing to synergy effects of micro and macro - prudential analysis. while the german model of a dual banking supervision system has proven to be effective, international cooperation among financial supervisors needs further improvement. colleges of supervisors for internationally active categories of banks are a good first step in this regard. secondly, being a “ liquidity provider of last resort ”, central banks are concerned with tensions on the money markets. since the beginning of the subprime crisis, central banks have been providing commercial banks with comprehensive liquidity measures. after the lehman collapse and the subsequent drying - up of wholesale funding markets, these operations have been further intensified. the eurosystem has repeatedly declared its intention to continue its generous supply of liquidity as long as necessary. however, underlying solvency problems – while not always clearly separable from liquidity problems – cannot be solved by central banks or banking supervisors it is a core government task, and the german

##cy requirements laid down by the supervisory authorities. as the equity capital ratio is derived from the risk assets and the market risks, on the one hand, and from the capital resources, on the other, both the soundness of the accounts and their international comparability are of paramount importance. in view of the increasing number of ever - larger takeovers, the effects of different methods of accounting can be considerable. for example, differences in consolidation procedures, which may result in a sizeable goodwill item in one country but not in another, would give rise to unequal competitive conditions owing to the fact that the banking supervisors are required to deduct goodwill from the liable capital. this means that the equity capital ratios would present a bank in too positive a light if, for example, credit risks were not adequately reflected in the accounts. iii there is no doubt that the informative value of the annual accounts is the main consideration in the present iasc - iosco plan. the german banking supervisory authority, too, is giving the project its explicit support. it agrees that the market players on the international financial markets must provide more transparency, thereby fostering the stabilisation of the financial markets. this stabilisation will be achieved through improving market discipline. a better flow of information will enable counterparties and shareholders of institutions to take more appropriate decisions on investment and loans and, consequently, will influence the actions of the banks. market discipline is not a substitute for but a complement to banking supervision, and should prompt credit institutions to pursue a risk - conscious and prudent business policy. the institutions themselves may also derive benefit from improved transparency. creating a modicum of trust in the eyes of the general public through the regular flow of reliable information lowers the level of susceptibility to market uncertainty, enhances the accessibility of the capital markets and promises more favourable refunding conditions. again, banking supervisors can expect compliance with prudential rules to be enhanced as well. naturally, market discipline has the biggest role to play at the major listed institutions. it is primarily institutions that are in the public eye that have to expect sanctions as a result of insufficient information. however, those institutions are among the major channels through which regional crises are spread internationally. ladies and gentlemen, there is, of course, also scope for discretion in drawing up accounts. these discretionary powers can substantially impair the flow of information if they are deployed in different ways according to the interests of the institution concerned. in valuing assets