##ing and learning mechanisms. and finally, personal integrity of practitioners. this is key. in the end, both the auditors and the financial directors who sign off on financial reports, and their supervisors, must be constantly aware of their fiduciary duty to the public and to the continued functioning of the delicately balanced, fragile, trust - based system they operate in. thank you for your attention. bis central bankers ’ speeches

for instance through technical improvements in the way risk is measured for regulatory purposes and constrained through regulatory rules? according to the tinbergen principle, we need two tools to accomplish our two objectives of price stability and financial stability. macroprudential regulation is this second tool. in the past, central banks shaped interest rate policy to achieve stable prices. when we decided on the appropriate level of the policy rate, we took the regulatory environment as a given. for instance, we had to assess the impact of a policy rate hike or cut by a quarter percentage point, given certain regulation on capital requirements for banks and on the working of securities markets. the mechanism through which a change in the policy rate influences the development of prices and the real economy – the so called transmission mechanism – was seen as exogenous from the central bank ’ s point of view. this is in fact a sensible approach to microprudential regulation, which is concerned with the health of individual institutions. microprudential rules, once agreed upon, are not altered frequently and certainly not in reaction to macroeconomic developments. macroprudential regulation, i. e. the use of prudential tools with the explicit objective of promoting the stability of the financial system as a whole, however, is by definition concerned with macroeconomic outcomes and much closer to the core monetary policy objective of the central bank. the introduction of macroprudential tools is a game changer that raises very complex questions of interaction between, and coordination of, monetary policy and macroprudential use of ( regulatory ) instruments. i have already touched upon this interplay in terms of central bank responsibilities and accountability. in the daily handling of interest rate policy and macroprudential tools, the existence of two tools raises tricky issues. let me give an example : since monetary policy decisions may also affect financial stability, should central banks take into account the possible implications of their decisions on financial stability when making decisions targeted at future inflation risks? what would take precedence when both goals conflict? the ecb, as i mentioned at the beginning, has a clear priority for the statutory commitment to price stability. therefore, the adequate strategy would be to avoid conflicts from arising by preemptive action. this involves having a strict regulatory regime that ex ante prevents the emergence of a financial crisis and that contains credible resolution mechanisms in case of need. more fundamental changes will be needed, however, to prevent the crisis patterns i mentioned before. austria fortunately has a rather conservative banking