responsibilities. the draft of an act to strengthen german financial supervision that was released just a few days ago follows exactly along these lines. bis central bankers ’ speeches however, the indirect approach, which is a crucial element in the european concept of macroprucential surveillance, is far from being completely implemented. it remains an important challenge to find a system of rules and procedures for applying macroprudential instruments to address country - specific or sectoral risks. it is important to reconcile the goal of completing a single market for financial services with the need for sufficient macroprudential flexibility. moreover, formidable challenges refer to the acquisition of what i have called the totality of relevant information. it is against this very background that statistics enter the stage. statistics, together with it, are probably the most important means for macrofinancial analysts to meet their information needs. conceptual challenges the g20 data gaps initiative aims at both strengthening existing statistics and at developing new ones. as regards the development of new statistics, the task is quite challenging. take, for instance, the initiatives on enhancing information on financial linkages, on mapping exposure and funding patterns or on identifying the activities of non - bank financial institutions, just to mention a few. off - the - rack blueprints on how to proceed do not exist. the legal framework for data collection needs to be broadened in some countries. confidentiality issues will have to be addressed. and, last but not least, analytical guidance is necessary for the collection of data and for prioritization and coordination of statistical activities. 3. 1 data requirements need to be based on sound arguments any request for statistical data should be analytically driven. to be provocative : “ do you really need the data that we do not have? ” this means that the goal of any research must be clearly defined, and that at least some preliminary ideas of how to proceed must be developed in advance. it is a prerequisite for statisticians to set priorities when employing their resources in their search for data that is fit for purpose. for the macro - prudential analyst, though, it is often the other way around : developing good ideas needs having at least some stylized facts before theorizing. this is a prerequisite for macro - prudential analysts. however, it has to be recognized that financial stability cannot be defined bluntly. to give an example : the measurement of financial distress requires a broad and open concept having many dimensions which evolve over time. what

sector, making its macroprudential analysis very important but difficult to handle, statistically as well as conceptually. this situation presents extraordinary challenges for supervisory and regulatory authorities as highlighted in a fsb report to the g20 in october of last year, and, only recently, in the european commission ’ s green paper on shadow banking. the immanent concern with shadow banking is thus its lack of transparency. what are our options for the territory of shadow banking to be charted? shadow banking involves entities and activities outside the regular banking system, and statistical data collection in many parts is still quite sketchy. obviously, there is an urgent need for central banks to be given an extended mandate for the collection of data not only from banks but also from non - bank financial institutions. what can be done in the short term? as you know, there are two standard prescriptions frequently recommended as an initial remedy. the first of these is an extended analysis of flow of funds data. the second is an evaluation of counterparty information from balance sheet statistics. as regards the flow of funds, these transmit an idea of the main structures of the financial system : no more, but no less. building on this feature, the g20 data gaps initiative suggests that flow of funds information be amended by detailed sectoral accounts in the form of “ from - whom - to - whom ” tables, and, in fact, the imf has already presented a pilot by submitting a standardized report form, based on what they call the “ balance sheet approach ”. a similar project is under way in the escb with promising results. nevertheless, the critical point is that our basic statistics on financial institutions outside the regular banking system be improved. as regards counterparty information from balance sheets, these allow the mapping of exposures between the reporting institutions and financial entities elsewhere. in order to shed more light on shadow banking activities, a more disaggregated sectoral breakdown is needed. initiatives have been launched, for instance, in the context of the bis consolidated banking statistics, where we will see positions vis - a - vis “ other financial institutions ” being broken out separately. there also exists a considerably more ambitious attempt at collecting detailed counterparty data in some other bis surveys, notably the otc derivatives statistics, where you can find data on credit default swaps broken down, among others, into positions vis - a - vis insurance firms, spvs - and hedge funds. the problem here is that operational definitions − say