wrote this, "Nothing is possible without men." I think he meant men and women, but in those days, and then he added, "Nothing is lasting without institutions." And I could add that nothing can flourish without cooperation. Cooperation often starts with individuals who know and trust each other, who have been meeting in conferences like this one. But it lasts only when it is anchored in rules and procedures. Those of you who have devoted your working life to that appreciate this.
So today, what I will do briefly, because I don't have so much time, I would like to mention how institutional cooperation operates at two different levels at the moment: at the European level and globally, where clearly, from my vantage point, we face two completely opposite movements.
In Europe, as I said, from my vantage point, and you may disagree, it seems that we cooperate more closely than ever, and the challenge is actually to keep clear who is responsible, who is accountable for what, so that each authority can effectively be held to account for what it is responsible for. The risk of cooperation is that you dilute so much that the principle of responsibility and accountability can fade a bit.
Globally, we face exactly the opposite problem. We rely on international cooperation more than ever in bank regulations, in payments, in many other fields as well. Just as some of our partners, the ones that we expected would be perfectly reliable, are becoming less willing to provide that cooperation.
So what I see happening in Europe and what I see happening globally, I will go into, and then see what the responses to that could be. So the Maastricht Treaty created the ECB, the European Central Bank, with a single primary objective and relatively few other institutions to work with. The main concern in arranging its relationship with the other institutions and the member states was essentially to put safeguards in place, rail guards, barriers eventually.
Whether you look at the rules on independence or you look at the way in which monetary policy should not do monetary financing, those were the kinds of rail guards that were put in place. They remain central, and I can tell you something: I don't think that we have one monetary policy meeting of the Governing Council at which we do not actually address one of these two or both.
But since then, much more tasks have been lifted to the European level. In 2014, the ECB took on banking supervision, and around us the Union has built a network of authorities. The European supervisory authorities were set up in 2011, and the Single Resolution Board in 2015, and the anti-money laundering authority last year with MiCA.
While MiCA has given supervisors across the Union responsibility for crypto assets, many of their mandates, those institutions that I just mentioned, actually bear directly on our mandate. So we now have far more counterparts to work with and sometimes to associate with, but also sometimes to differentiate us from.
We have made real progress, I think, in making that work. Resolution is a good example. Earlier this year, we amended our counterparty framework so that sound banks emerging from resolution can regain access to our operations. Keeping such banks funded also depends on the Single Resolution Board, the Commission and national authorities acting in time, which is only possible because we prepare ahead of that together.
But closer cooperation poses challenges for how we are held to account. Accountability operates mainly ex post. We take a decision, we try to explain it as well as we can, and the European Parliament, the courts and the auditors judge it against our mandate. That model works best when an outcome can be traced back to a single authority. The more decision makers are involved, the harder that becomes.
And yet, citizens need to know who exercises public authority. And for an independent institution like ours, this matters even more. That was the European side of what we perceive as central banking. If I look now at the global level, the picture is pretty much the opposite.
More of what affects our tasks now crosses borders. For example, stablecoins. Most of them issued outside Europe in funny places, actually, and most of them denominated in US dollars. They offer a digital alternative to bank deposits and could certainly weaken the channels through which our monetary policy is transmitted. The large banking groups we supervise operate across many jurisdictions.
Dealing with these particular challenges requires cooperation, and cooperation is based on trust, and trust has to be reciprocated. Within the European Union, because of the framework we have of the institutions that have been assigned responsibility, the trust can be assumed.
Our cooperation takes place within a legal order that rests on shared constitutional values. We are bound by the duty of sincere cooperation with the other authorities and with the member states, and we are all subject to a single judicial system with the Court of Justice at its supreme point.
But beyond our borders, trust has to rest on explicit agreements and shared international standards. And those foundations, I stand to be corrected, but from what I see, those foundations are weakening. Rules for bank regulation agreed at international level years ago, I was there in 2008 when we started.
Well, those rules are being reopened, and some jurisdictions now see the global spread of stablecoins, for instance, in their currency as a way of extending its might and reach. So just when we need international cooperation the most, it has become harder to rely upon. And I've only used stablecoins as one example, but I could use a whole range of examples. So the question is, what do we do about that?
At each level there is a tempting response that we should resist. So the first temptation in Europe is to rely on informal cooperation. Informal cooperation built on goodwill, personal relationships, and all of that is always necessary, and it works particularly well in calm times.
But people change, and we cannot let systemic outcomes depend on whether the individuals involved happen to get along with each other. So the better answer is to make cooperation part of how we are held to account. And that starts with continuing to consult other authorities and exchange information with them before we decide, and recording how that exchange has shaped our decisions.
The record then shows that we made the effort to take the concerns of others into account, and that we were clear about what fell within our competence, our jurisdiction, and what did not. Where we decide differently from what others would have wished, it shows that we had good reasons for doing so, and that is what allows us to be judged fairly afterwards.
You know, there are institutions that you join and you just wonder why people write or type just about every single thing. And that's not for the sake of accumulating record and history, but it's for the sake of precisely that: what was said, what was agreed, what did we consult about, what was the ultimate decision-making process.
It also means writing the division of responsibility and the forms of cooperation into law, so that they are transparent and they can be publicly tested. That clarity matters most in a crisis when there is no time to resolve ambiguity.
The second temptation globally is to step back when others do so as well. But that would leave us more exposed to decisions taken elsewhere and to risks that can only be mitigated when we act together. So instead of that, we need to be realistic, because in a race to the bottom, everybody ends up at the bottom, and that's the issue.
So we should keep supporting global standards and look for common ground wherever we can, whenever we can, concentrating on the areas where cooperation matters most, such as the resilience of cross-border banks, for example. Where broader agreement is out of reach, we can build coalitions of the willing.
Let me give you an example. The NGFS, the Network for Greening the Financial System, is one such example of a coalition of the willing on a grand scale. As you may have noticed, last year several of its members actually left the NGFS.
And yet, since then, the NGFS has grown and now brings together almost 150 central banks and supervisors from more than 90 countries. Some would even argue that it is probably better that way, because those who left were not cooperating that much because they felt uncomfortable for whatever reasons.
Finally, we have to protect our own system from risks we cannot control, whether to financial stability or to the values our legal order protects. That is why we have argued, I'm going back to that, that stablecoins issued jointly inside and outside the Union should not escape European safeguards.
So it's not a question of being against such instruments, but it's a question of having them governed by the set of rules and laws, guidelines as well, that apply within Europe. In other words, for instance, European holders cannot count on reserves that are held abroad that eventually would be made available to them, if only because in case of a run, you just don't have time to go and seek out the reserves that have been accumulated somewhere else.
For those of you who've lived the 2007-2008 crisis, you would remember that some of those reserves, some of those buffers, stayed where they were. And that could very well happen.
So in all of this, we, I believe, should act in line with international law. It provides the framework for our cooperation, and where cooperation is not possible, it sets limits on what each jurisdiction may do alone, including when we protect ourselves.
When others step back from their commitments, and we're seeing some of that at the moment, sticking to ours is what makes us a reliable partner, and that's what strengthens the rules that we still share. I would quote Michelle Obama, actually, who said, "When they go low, we go high." And I think there is an element of that when it's a question of sticking to the rules and operating within the framework of international law in particular.
And you never know, some people eventually come back to the framework that we've had and that they contributed to building. So let me go back to Monnet. His point applies to central banks as much as it applies to Europe.
Cooperation between authorities depends on individuals, but it lasts only when it is built into rules and procedures. And you will have noted that the coalition of the willing that I mentioned in relation to the NGFS is also something that can be attributed to decision-making processes within Europe when an agreement at 27 is too complicated, and you start with the coalition of the willing and then open up.
In Europe, those rules have to make clear what each of us is responsible for. And beyond Europe, they are what we fall back on when the willingness to cooperate weakens.
Much of that work actually falls to you, to us, to the lawyers. For any arrangement you draft, any arrangement that you interpret, you should be able to say who takes the decision and where it can be challenged and who is accountable. If that cannot be done, then the arrangement is not completed.
I will stop here, and I know that you will have a fascinating panel to finish those two days of conference. I thank you for the attention that you've given me. I regard it as a precious gift that I take away. As you say, between lawyers, we can understand each other. [applause]
