accounting conventions need to be modified? or can other regulatory frameworks correct these effects? consistency of valuation rules this leads me to the last point that i would like to an address today : the consistency of rules and practices with respect to valuation. there are currently differences of approach between accounting practices, prudential regulation and risk management practices. it is thus wholly accepted in the financial industry that there is inevitably uncertainty surrounding the valuation of financial instruments, particularly when they are complex or illiquid. in addition, the limitations of mathematical models are recognised. these two factors, i. e. price volatility over the financial cycle and the limits of quantitative techniques highlight a number of divergences between internal risk management and fair value accounting. more generally, the application of accounting rules, which give the value of a company or activity at a given moment, does not always allow the forward - looking valuation of financial instruments or sound risk management practices. yet these aspects are important for prudential authorities. conversely, choices in terms of prudential regulation can have an impact on financial stability when they interact with certain accounting rules. for instance, the hitherto favourable treatment given by prudential rules to the trading book has without doubt encouraged behaviour aimed at generating very shortterm profits via transactions booked at market value. like me you will have noted that, in their press release in november, the g20 heads of state and government gave particular attention to accounting issues. the work programme they have assigned to ministers and experts addresses several areas. it is aimed at " harmonising accounting standards, particularly for complex instruments, during times of stress ". it also aims to " address weaknesses in accounting and disclosure standards for off - balance sheet vehicles ". lastly, it aims to " enhance the required disclosure of complex financial instruments by firms ". the heads of state and government have assigned an ultimate objective to accounting standard setters, i. e. the creation of a " single high - quality global standard ". it is striking that the attention given to accounting issues is linked to financial stability considerations. to conclude this address that has already been rather too lengthy, i should just like to remove any ambiguity that may have arisen from the discussions that have intensified with the crisis. i do not think that it is in anyone's interest in the current period to weaken accounting conventions. accurate, rigorous and fully transparent financial statements are the bedrock of financial activity. the aim of the work and discussions that have been actively pursued

– with respect to global harmonisation. it would be fair to assume that the global financial crisis and its aftermath played a considerable role in that respect. in the wake of the crisis, we have witnessed a resolute international response led by the world ’ s twenty heavyweight economies. the international community has put on a truly remarkable display of determination. while the g20 was founded quite some time before the crisis, its members ’ resolve to take common action was unprecedented in the us city of pittsburgh in 2009 and at subsequent summits. key milestones were achieved in international banking regulation. and this will to reform continued until recently, when the new international minimum standards for banking regulation, also known as basel iii, were finalised. 1 / 5 bis central bankers'speeches the international response to the crisis was necessary to make the architecture of the global banking system both credible and acceptable to society at large. but let ’ s not get carried away by global thinking, and we should not fall into the trap of global harmonisation as a cure - all – by which i mean the idea that, if some global rules are good, more global rules would always be better. instead, we have to live with the fact that, in today ’ s world, international agreements are still made with national and regional interests in mind. and even though there are strong arguments in favour of harmonisation, we have to respect that, in some areas, there are also strong arguments against common approaches and reasons as to why countries should set their own distinct sets of rules. a key topic nowadays is that of nations striving for greater sovereignty. in europe, the most striking example of this was when the united kingdom decided in a national referendum in 2016 to withdraw from the european union. on both sides of the atlantic, too, we have also experienced it in the form of drawn - out negotiations for trade agreements. just think about the criticism levelled against ceta, the comprehensive canada - eu trade deal, and ttip, the corresponding us - eu project, which slowed these projects down or even brought them to a halt. proponents of greater national sovereignty have a point : sovereignty provides scope to deal with issues in a national way. a regulatory landscape that is aligned to national particularities requires, to some extent, that there are national instruments and policies on hand. fully harmonised rules take away that leeway. we can even observe this with respect to banking regulation. currently, global standards that are aimed at large and internationally active