the concrete steps that move in this direction. i would like to separate these into two categories : those that relate to the regulatory framework and those that pertain to the supervisory framework. the regulatory framework let me begin with some reflections on the regulatory framework. going back to the principles i highlighted earlier, i believe we should build upon the regulatory framework that already exists in the eu. any improvement to the eu framework for financial supervision should first seek to fully exploit the potential of the existing framework. in this respect, the concepts and responsibilities of home and host supervisors and the framework for consolidated supervision are well - embedded in the existing banking directives, and it makes a lot of sense for them to form the basis of the future approaches. indeed, the directive to implement basel ii in the eu – the so - called capital requirements directive – contains key provisions which will reinforce the role of the consolidated supervisor in relation to applications to use the advanced approaches of the new capital framework. as i am sure you are all aware, these provisions will allow banking groups to make one application for approval in relation to the group as a whole, and will require the relevant supervisors to co - operate in trying to reach a common agreement on the application. should it prove not possible to reach agreement within six months, the consolidated supervisor will have the power and responsibility to take the decision. this is a significant development in the regulatory framework, giving the consolidated supervisor the possibility to take decisions with an impact that reaches outside the national jurisdiction. i am aware that the european banking federation believes that full consolidated supervision should be determined now as the ultimate objective for the eu regulatory and supervisory framework, but i believe that we have to approach this carefully, and see how the new provisions work in practice in this more restricted area. i also think that it is important to recognise and respect the legitimate concerns of host supervisors. as i have already mentioned, the banking systems of some of the new eu member states are predominantly made up of incoming institutions. we should ensure that host supervisors are able to access sufficient information on the institutions operating locally and, where necessary, in relation to the wider group. the capital requirements directive also includes provisions in this respect and notes the need to take account of the significance of the institution in local markets. looking at the wider prudential framework let me mention two specific areas where the european commission is currently reviewing the existing eu regulation. the first area relates to deposit guarantee schemes. although the deposit guarantee directive of 1994 was useful in setting common minimum

government can use the new payments platform to make, and receive, some of its payments. so it is a busy time at the reserve bank. further details on these and other projects that we are working on will be available in the bank ’ s annual report, which will be tabled in parliament and released mid next month. thank you. my colleagues and i are here to answer your questions. 5 / 5 bis central banker's speeches