regard, in order to improve the efficiency of financial regulation across markets and jurisdictions. looking forward potential new risks stemming from micro - structural issues such bis central bankers ’ speeches as ucits exchange - traded funds and high frequency trading, which i mentioned before, need to be properly addressed. regarding the access of credit institutions to central bank funding, their eligibility should be based on their financial soundness, as assessed through their solvency and liquidity robustness. it is therefore of crucial importance for central banks to have access to relevant and detailed micro - prudential information and assessments on their monetary policy counterparts. moreover, this assessment cannot be dissociated from prudential information on the banking group to which the respective counterpart belongs. this calls for an enhanced participation by central banks and their involvement both in the eu college of supervisors and cross border stability groups. before i conclude, i think it would be appropriate to point out that the increased level of interconnectedness of financial systems and banking groups highlights the need for improved cross - border cooperation and crisis management. finally, let me mention human capital requirements as another key area which often goes, unmentioned yet is important for improving the quality and efficacy of supervision. by combining the competencies and skills of supervisors and central banks, the ese initiative certainly contributes to enhancing the convergence of practices. under this welcome initiative, the efforts of the banque centrale du luxembourg will continue to enhance the approach adopted by the ese initiative. ladies and gentlemen, i wish you a pleasant stay in luxembourg, and an interesting and successful conference. i am sure the presentations as well as the panel discussions will include interesting and fresh ideas and insights from which all participants can benefit in their ongoing tasks, be it at local or cross - border level. bis central bankers ’ speeches

yves mersch : financial crisis and the challenge of supervision welcome address by mr yves mersch, governor of the central bank of luxembourg, at the ese ( european supervisor education initiative ) conference 2011 : “ financial crisis and the challenge of supervision ”, luxembourg, 28 september 2011. * * * ladies and gentlemen, it is a great pleasure and an honor to host the 2011 european supervisor education initiative conference on financial crises and the challenge of supervision here in luxembourg. i am pleased to note that so many participants from the supervisory and central banking community are attending. i am convinced, that stimulating input by the distinguished discussants will be beneficial to all participants. the banque centrale du luxembourg, given its mandate of prudential liquidity supervision and its role in macro - prudential policies, has joined the european supervisor education initiative in 2010. against the background of renewed vulnerabilities and turbulences in markets, the subject of the conference is indeed very timely. liquidity risk, together with sovereign and funding risk constitute for the time being the main threats to the eu - banking system. the recent intensification of tensions in the sovereign debt market has led to contagion risk of systemic nature. from a supervisory perspective, let me redraw that the past financial crisis have evidenced the fact that micro - prudential supervisory instruments and tools alone, if used in an isolated way, may no longer be sufficient to address the challenges posed by financial instability. the need has been highlighted to restructure regulation and supervision and to go beyond a purely micro - prudential approach in this regard. focussing on the development of a macroprudential framework should better position authorities to contribute to reducing pro - cyclicality and improving the financial sector ’ s resilience to adverse shocks. in response to the regulatory challenges, the european system of financial supervision ( esfs ) has been established, under which the european systemic risk board ( esrb ) has been made responsible for the macro - prudential oversight of the financial system as a whole. the work of the esrb, which is founded on close cooperation between central banks, national supervisory authorities, the european supervisory authorities ( esas ) and policy makers, will contribute to the mitigation of systemic risk within the financial system. however, despite the significant progress in institutional architecture at the european level, crucial areas within global and national financial systems remain fragile and vulnerable to unexpected shocks. all countries face a varying degree of challenges. in