fsap ) are effectively and consistently implemented and enforced at the national level. behind this broad orientation lies the shared notion that the main efforts to remove residual legal and regulatory obstacles to the free provision of financial services in the eu have been achieved with the fsap. therefore the adoption of new community legislative initiatives should be evidence - based. the role of public intervention in regulating the eu financial sector remains important. first, developments in financial markets will always pose challenges to the existing regulatory framework that have to be considered. second, the consistent and correct implementation of fsap measures at the national level remains a challenging task for all authorities involved, notably the commission, national governments and supervisory authorities. third, the importance of the work of consolidating and simplifying the existing eu regulatory framework proposed by the commission should not be underestimated. indeed, this work represents a window of opportunity for rationalizing the existing london economics ( 2002 ), “ quantification of the macro - economic impact of integration of eu financial markets ”, report to the european commission. 1 / 4 rules applicable to financial institutions, especially those operating on a cross - border basis. it also involves the pursuit of synergies among the several eu public policies applicable to the financial sector, notably financial services, consumer and competition policies. if this process is successful, responsibility for promoting financial integration will then chiefly lie with financial institutions themselves, which should exploit the framework promoted by public authorities to expand their activity across borders. in this context, i would emphasise that this is also dependent on the ability of the financial industry to coordinate its members effectively whenever common initiatives are needed. this applies for instance in the areas of payment and securities clearing and settlement systems, where common infrastructures benefit cross - border transactions. in this field there is also a specific role for public authorities, notably to serve as catalysts for coordination among market participants, thus facilitating the emergence of market - led initiatives. one example is the role played by the eurosystem in the promotion of the single euro payments area – sepa – project, where the ecb, together with the european commission, strongly supports the integration of retail payments. financial regulation turning to the area of financial regulation, let me highlight three aspects. first, there is a need to proceed with the adoption of the remaining measures envisaged in the fsap in order to complete the regulatory framework. in this respect, from the ecb ’ s perspective, the planned legislative work in

contra - cyclical. in this regard and especially in the light of the profits announced by the major banking groups and the large payouts to traders, ceos or shareholders in the form of dividends, i would like to stress that these profits should primarily be used to bolster capital ratios and allow banks to focus on their core task of financing the economy. all in all, i praise international standards in the field of prudential rules. the ones already developed over many years and which the crisis is now leading us to adapt, or the new ones under scrutiny, are only meaningful and will only produce their desired effects if they are applied by all countries and, needless to say, first of all by those that negotiated them. from that viewpoint, the adoption of the basel ii framework by the united states looks to be one of the most important and urgent issues. it is also very important to improve and harmonise accounting standards. the views of g20 countries sometimes differ as to the role of accounting. for instance, one contentious issue is marking - to - market and the extent to which fair value accounting should be applied. it is vital that the accounting choices of standard setters better take on board the financial stability dimension, since they have an impact on the latter. lastly, the crisis has also highlighted the limitations of self - regulation ; it is also essential that the regulation of all systemically important institutions and markets be proportional to their potential impact on financial stability. however, in order to implement such an approach, agreement would have to be reached at the international level on a standard definition of the systemic nature of an entity, which clearly does not depend on its size alone. moreover, the consistency and the appropriate balance of such potential specific rules with the general rules must also be ensured. for instance, for banks, it is important to allow for the fact that the size of an institution is already taken into account in the prudential ratios, since capital requirements are proportionate to exposures. it is also important to bear in mind that the diversification of business lines, which goes hand in hand with a certain size of institution, may be a factor of resilience that should not be discouraged. this is an important and delicate task that has been entrusted to the fsb. 2. developing multilateral surveillance i will now turn to collective surveillance. let me start with the following simple observation : the crisis did not emerge from where we were expecting. our warning systems, both at the national