Yannis Stournaras: Financial stability in Europe and how to improve it
Speech by Mr Yannis Stournaras, Governor of the Bank of Greece, at the Croatian National
Bank "Financial stability and policy intervention by Central Banks in Europe - where do we
stand and what challenges lie ahead", Zagreb, 23 March 2016.
* * *
Before I begin my presentation, please allow me to dedicate the following remarks to the late Vassiliki Zakka, who
was an exceptional colleague at the Bank of Greece and a dear friend. Before passing away unexpectedly
several weeks ago, Vasso had contributed to the drafting of this speech. She will be badly missed.
Ladies and gentlemen,
It is a great pleasure to be in Zagreb today and to have the opportunity to share with you
some thoughts on financial stability in Europe and, in particular, how to improve it. Financial
stability is a critical condition for achieving our common goals of prosperity and sustainable
growth. Yet, the financial landscape on which both regulators and market participants
operate, has been rapidly changing; it is very different today from what it was only ten years
ago, and it will be very different ten years from now.
I will begin by describing the present landscape on which efforts to strengthen financial
stability have been taking place. Then, I will briefly discuss some developments in the EU
regulatory framework relevant to the financial system and its stability. In particular, we can
identify a new role for central banks in this framework that stems from mandates that have
been revised to include the safeguarding of financial stability. I conclude by outlining the
challenges ahead and I provide some thoughts on the way forward.
A. The setting - a broader context
Beginning with the initial efforts to forge closer European integration in the early-1950s, the
European Union has faced a series of challenges that have, at times, tested both the
coherence and the stability of the union. The responses to these challenges have shown that
the EU is built on solid ground as the bonds among Member States have become stronger
over time. To cite two notable examples: the breakdown of the Bretton Woods System in the
early-1970s led to the creation of the European Monetary System - or EMS - in the
late1970s; the breakdown of the EMS in the early-1990s led to the creation of the euro in 1999.
Developments since the eruption of the 2007-08 international financial crisis have further
strengthened the bonds among EU members. That crisis raised issues related to
"too-big-tofail", "too-big-to-save", and "too-complex-to-resolve". The Basel Committee on Banking
Supervision, following the G20 agreement in 2008, took-on the task of comprehensively
strengthening international bank-regulatory standards. Its updated report, presented to G20
Leaders last November, noted that substantial progress has been made towards finalizing
post-crisis reforms and that the regulatory-reform agenda for global banks has almost been
completed. Further clarification of these elements will provide regulatory certainty, supporting
the banking sector's ability to make long-term sustainable business plans.
The euro-area financial crisis, which originated in 2009-10, provided another - more serious
- challenge to the stability of the European Union. More recently, with the recovery in the
euro area still fragile, a slowdown in growth in the Emerging Market Economies, along with a
rise in geopolitical tensions, which have led to an unprecedented refugee crisis, and
concerns about a Brexit, have led to an increase in uncertainty. Finally, different approaches
among member states regarding banking union, and the slow progress in establishing a
single European deposit insurance scheme, have been hindering further progress in securing
the financial system architecture needed to enhance stability.
A salient characteristic since the onset of the euro-area crisis is that shares of European
banks have been trading at a discount to tangible book value, while those of the largest US
banks have traded at a premium to book value. This situation cannot be explained by
differences in capital-adequacy ratios since capital ratios for euro-area banks have risen from
about 8 percent in 2008 to about 14 percent today (Coeuré, 2016). On the contrary, these
differences are indicative of a European banking sector undergoing a transformation that
demands a comprehensive and radical adjustment of the core business model of operation.
The first two months of 2016 saw a sharp deterioration in market sentiment, related to not
only a weakening of global economic activity, but also other concerns:
• First, the threat of low nominal growth, generating not only high NPL ratios but also
lower and flatter yield curves with potentially negative effects on banks' profitability.
• Second, concerns about the effectiveness of monetary policy, with some market
analysts believing that central banks may be running out of ammunition. I can
assure you that they are not. The monetary-policy decisions by the ECB Governing
Council two weeks ago provide clear confirmation of this fact.
• Third, regulatory uncertainty about the suite of capital and bail-in requirements - the
Supervisory Review and Examination Process (SREP), the Minimum Requirements
for Own Funds and Eligible Liabilities (MREL), the Total Loss Absorption Capacity
(TLAC), and EBA guidance on the minimum distributable amount (MDA).
Uncertainty as to the actual effects that can be expected from the newly introduced
BRRD instruments seems to have played a role.
• Fourth, negative feedback loops between equity and debt markets, amplified by low
secondary market liquidity.
B. The EU response
The responses of the European Union to the weaknesses to the financial stability landscape
that emerged have been effective, despite the initial lack of crisis mechanisms and the
unfavorable and challenging environment - an environment in which fires were often being
simultaneously fought on a number of fronts. Initially, the response came in the form of
monetary policy and a significant easing of the monetary policy stance. Indeed, in October
2008, six major central banks, including the ECB, executed a coordinated and simultaneous
cut in interest rates. Additionally, at that time the euro-area countries set out an action plan of
coordinated measures to restore confidence and improve financing conditions in the
economy. These measures included the granting of government guarantees on bank debt
issuance and the recapitalization of banks. With the eruption of the euro area financial crisis
in 2010, and during subsequent periods when the monetary transmission mechanism was
dysfunctional, the ECB increasingly implemented nonstandard monetary tools. Additionally,
to provide financial assistance to countries under stress, in June 2010 Europe created the
EFSF, which was replaced by the ESM in October 2012.
Perhaps the greatest challenge - and surprise - posed by the euro-area crisis was in the
area of financial integration and banking. At the inception of the euro, it was widely-expected
that the single currency would spur integration across previously-fragmented European
financial markets. Economists believed that this integration would be stabilizing: portfolio
diversification and access to credit markets were expected to encourage risk-sharing while
making national demand less dependent on national income - that is, portfolio diversification
was expected to encourage consumption smoothing. And for the euro's first ten years, that
scenario unfolded very much as expected.
Then came a major surprise. The euro-area crisis revealed that countries within a monetary
union can become subject to balance-of-payments crises - a possibility that had been almost
completely overlooked by the architects of the euro. Moreover, once a crisis erupted -
whether in the sovereign sector or the banking sector - a central feature of the crisis was the
negative feedback loops between banking fragility and sovereign weakness. One factor
contributing to those feedback loops was the following. Although the largest banks in the
euro area and the United States are of roughly the same size in terms of euro-area GDP and
U.S. GDP, respectively, the largest euro area banks represent a much larger share of any
individual national economy in the euro area compared with the situation of U.S. banks. This
circumstance implies that the fiscal consequences of euro-area bank failures could be large
enough to bring state-solvency into question. Moreover, the fact that bank regulation and
supervision prior to the crisis were mostly national was seen as having contributed to the
crisis and as having impeded its effective resolution. Consequently, a key lesson of that crisis
has been that a monetary union is not viable in the absence of a banking union.
In response to these developments, in 2012 European leaders initiated the creation of the
Banking Union - which is an integral part of a genuine Economic and Financial Union in
Europe. The three pillars of the Banking Union are: the Single Supervisory Mechanism, the
Single Resolution Mechanism and the still-to-be completed common deposit guarantee
system.
As of January 1st 2016, the Banking Recovery and Resolution Directive (BRRD), which sets
common EU rules for failing banks, entered into full force. The BRRD aims, inter alia, to end
the policy of bailing-out failing banks by introducing bail-in tools to ensure that losses are
borne by creditors, including senior unsecured creditors. The BRRD, especially its bail-in
tool, has been criticized - perhaps with some justification. However, the argument
sometimes made, namely, that the activation of the BRRD has been a primary cause of the
recent deterioration in market sentiment, including the large losses in European bank stocks,
is far-fetched. The provisions of the BRRD have been widely known since 2014. What
analysts, perhaps, failed to realize is that the new and stricter rules introduced with the
BRRD will affect the volatility of the prices of banks' shares should concerns be raised about
the banks' profitability, solvency and, most importantly, their viability.
That said, we must keep in mind that the BRRD is a new and untested framework for failing
banks, and it is not particularly suited to addressing a systemic crisis. As it will be revised by
June 2018, we will have to closely monitor its implementation and identify any areas where
adjustments and fine-tuning will be needed.
While we may need tools for failing banks, our primary aim as supervisors is the prevention
of bank failure, in order to foster financial stability and ensure that depositors remain
protected. As John Vickers (2016) recently highlighted "Orderly bank failure is better than
disorderly failure, but it's best not to fail in the first place...Regulators... are adding usefully to
the supply of fire extinguishers. With more fire extinguishers the average damage from a fire
is materially reduced. But that is no good reason to economise on fire prevention".
C. Central Banks and macro-prudential policy
Now let me turn to the issue of crisis prevention. The challenges facing EU financial sectors
in recent years have significantly increased the responsibilities of central banks in the area of
crisis prevention. Mandates have been amended to explicitly refer to financial stability -
typically defined as avoiding rapid credit growth combined with increases in asset prices
beyond those justified by the economic fundamentals - as a core central bank task. The
toolbox for providing financial stability has been expanded to include macro-prudential policy
tools and enhanced micro-prudential policy tools for both the national authorities and the
SSM. Examples of macro-prudential tools include: a countercyclical capital buffer, a systemic
risk buffer and the other systemically important institutions buffer along with measures to
control, inter alia, leverage, liquidity and large exposures.
In the past, it was not thought to be necessary to separate monetary policy from the task of
providing financial stability. It was thought that price stability in the market for goods and
services would be sufficient to ensure financial stability in the market for assets. The
experience since the early-2000s has dispelled such beliefs. That experience has shown that
the business cycle and the financial cycle are not necessarily synchronized; long periods of
disconnect between the two cycles can materialize. In particular, the financial cycle tends to
have larger amplitude and lower frequency than the normal business cycle.
Macro-prudential policy bridges the gap between the micro-prudential supervision of
individual banks and monetary policy. Its objectives are, first, to enhance the resilience of
financial institutions and the entire financial system, and, second, to smooth the financial
cycle. In this regard, macro-prudential policy allows monetary policy to focus on maintaining
price stability so that real economic activity can flourish, while micro-prudential supervision
focuses on individual institutions. In this way, macro-prudential policy enhances the
institutional separation that is one of the principles of the architecture of the euro area.
Indeed, I believe that a strong case can be made that, had macroprudential tools been
available ten years ago, we may not have had a euro-area crisis. Ten years ago
macroprudential tools to limit the excess borrowing that was taking place in the soon-to-be
crisis countries were either not used or were too weak to dampen credit growth sufficiently in
those countries.
That said, the usefulness of coordinating policies should not be forgotten - whether that be
coordination of specific policies across different countries (as happened in the wake of the
failure of Lehman Brothers with the simultaneous cuts in policy rates) or coordination of
policies within one jurisdiction. Respect for the independence of the various authorities
involved in securing financial stability should not imply separation and a lack of coordination.
Thus, I strongly agree with Danielle Nouy that "micro-prudential supervision needs to be
complemented by a macro-prudential perspective". It is imperative, however, that the
macroprudential toolbox be further enhanced with innovative tools beyond those focused on capital
requirements. Cyclical systemic risk can arise not only as a result of excessive credit
expansion (an issue that can be addressed with the countercyclical capital buffer) but also
because of inadequate channeling of credit that keeps the real economy under-financed for
extended periods.
A lesson drawn from the crisis is that we have focused on rather narrow areas of financial
activity. Nowadays, it is important that we focus on the risks that might be missed at the
micro level, that is the interlinkages between and among sectors, and thus explore how the
financial system can influence, and be influenced, by the wider economy. In the euro-area,
there is evidence of limited financing of the real economy, with the consequence that
euroarea investment has not recovered to pre-2008 levels despite ECB policies directly aimed at
increasing the lending of the banking sector.
D. Developments in the EU financial regulatory framework and further steps
ahead
Apart from the elements of Banking Union and the BRRD, a number of other important
regulatory initiatives have been taken, covering not only the banking sector, but also
insurance, financial markets and infrastructures. Many initiatives are on-going and further
steps are required for their completion.
If macroprudential policy is to effectively curb the financial cycle, it is essential to have tools
that deal with the credit-real estate relationship. There are two ways to deal with this
relationship. The first is by imposing restrictions on credit institutions - that is, through
capital-based measures. The second way in which the credit cycle can be moderated is by
limiting leverage by households and non-financial corporations.
With regard to the banking sector, the Capital Requirements Regulation (CRR) and Directive
(CRD IV) play a prominent role in setting the prudential standards for credit institutions and
investment firms in the EU. Implementation is ongoing and expected to be completed by
2019. From January 2016, the countercyclical capital buffer (CCB), the systemic risk buffer
(SRB) and the other systemically important institutions (OSII) buffer have been operational.
Given the need to diversify the available tools beyond regulations based on capital, tools
based on liquidity, leverage and funding sources are also being introduced.
With regard to the borrower's side, instruments such as the loan-to-value (LTV),
loan-toincome (LTI) and debt-service-to-income (DSTI) limits are considered to be among the most
effective macroprudential instruments in curtailing excessive credit growth. In order to
effectively moderate the financial cycle, a time-varying dimension is crucial in the design of
the various ratios. For example, the loan-to-value ratio should be lowered during the
expansionary phase of a financial cycle and it should be raised during the contractionary
phase. Otherwise, there is a risk of pro-cyclicality since leverage constraints decrease as
asset prices rise.
Regulatory initiatives for financial markets and infrastructures and the implementation of the
European Market Infrastructure Regulation (EMIR) include macro-prudential intervention
tools (such as an enhanced and cooperative oversight framework for central counterparties).
Thus indicators that will contribute to better monitoring the extent to which the system is
assuming more risks, as well as tools which can contribute to maintaining financial stability
are being developed.
E. Challenges ahead and the way forward
Challenges, of course, remain. I will highlight seven of these challenges.
1. The first challenge is the completion of the Banking Union. Questions surrounding the
financial capacity of the Single Resolution Fund (SRF), both in the short and in the long run,
have to be addressed. The size of the SRF has been criticized for being insufficient and its
governance structure has been criticized as being overly complex. If a sound backstop is not
in place, there will be pressure for stress tests to become softer, which would be a detriment
to financial stability. The ESM could become an effective backstop to the SRF, safeguarding
financial stability in the Banking Union. Another issue that requires further reflection concerns
the implications of implementing a single vs. a multiple point of entry in developing resolution
plans. With respect to deposit insurance, aside from the Deposit Guarantee Scheme
Directive (DGSD), the transposition of which is still pending in some Member States, the
proposed European Deposit Insurance Scheme (EDIS) is of paramount importance. Deposit
insurance at the supranational level will contribute significantly to financial stability by
providing a back-up when national schemes do not have the capacity to handle large shocks.
Such insurance will be a decisive step towards breaking the diabolical link between banks
and sovereign and, along with a sound backstop to the SRF, safeguarding stability across
the Banking Union.
It is also important to keep communicating with the markets. Thus, we have to provide
consistent communication on regulatory initiatives and macroprudential policies to reduce
regulatory uncertainty. It is necessary to revise the legislation and EBA Guideline regarding
the definition of the Minimum Distributable Amount (MDA) to bring it into line with other
countries. We need to harmonize the Minimum Requirements for Own Funds and Eligible
Liabilities (MREL) and the Total Loss Absorption Capacity (TLAC), for example, by using the
same definition of eligible liabilities for both tools and adjusting the relative thresholds. Close
cooperation between the SSM and the SRB will be needed. One first area where this
cooperation could be beneficial is at the level of the MREL. Finally, we need to promote
strategies for banking sector restructuring while having a comprehensive strategy to tackle
NPLs. This is particularly important for banks with high NPL ratios.
2. A second challenge ahead relates to the issue of the increased burden of complying with
the new regulatory framework and assessing its cumulative impact. I am not referring to
additional capital adequacy requirements. In the pursuit of making banks more robust, liquid,
responsible and transparent, huge progress to regulate their operation and supervision has
been achieved. However, there has been no estimate of the cumulative impact of these
regulations. I welcome and look forward to the report on the impact of capital requirements
on the economy; however, the impact of other regulations should also be examined.
We need to keep in mind the principle of proportionality. As new regulation accumulates, we
know that it can come with costs as well as with benefits. Policymakers need to be watchful
that, in attempting to limit externalities, they do not inadvertently create new externalities.
The financial sector ultimately exists to serve the real economy. It is very likely that there are
trade-offs between ensuring financial stability and imposing such a burden on the financial
sector that it ceases to be able to do its job, namely to intermediate between surplus and
deficit units in any economy in order to encourage long-term investment and growth. Thus
we have to develop methods to judge the appropriateness of indicators and tools. Since
many of the regulations have been applied over the last few years, that is, in a period of
acute financial stress, I expect that in the coming years there will be a need to reassess
those regulations and perhaps conduct some fine-tuning. Similar arguments apply to the
national options and discretion in the new regulatory framework.
3. Closely related to the previous challenge is the degree to which regulatory developments
should be front-loaded. The regulations themselves often have long phase-in periods such
that new versions of the regulations are developed before the previous versions have been
fully implemented. Supervisors have tended to compensate for the long phase-in periods by
front-loading all prudential requirements, a situation that sometimes can be considered
excessively harsh. Of course the long phase-in periods are often a reaction to the expected
impact of the regulation on bank behaviour and, in particular, on the lending to the real
economy. Some middle road has to be found.
4. A fourth challenge is the need to reduce reliance on models. Recently conducted
stresstests at the EU level followed a "single-model-fits-all" methodology, which left very little room
for idiosyncratic and specific national characteristics. Moreover, according to some analysts,
there is a risk that stress tests are becoming less effective as a supervisory tool. Instead,
they may increasingly be seen as having been undertaken in order to calm the markets.
Ideally, stress tests should be implemented in benign times in accordance with an old
wisdom attributed to John F. Kennedy, that "the time to repair the roof is when the sun is
shining". In crisis times, there is the risk that crucial inputs such as macroeconomic variables
are under or over-estimated and that adverse scenarios become unrealistic - either too
benign or too severe. In consequence, there are ambiguous outcomes that are difficult to
interpret. Additionally, the potential pro-cyclical effects of stress tests should be explored.
More appropriately, stress tests should not only place emphasis on solvency, but they should
explore the impact of the assumed shock on bank liquidity, the implications of applying the
bail-in tool, the funds needed to meet any demand on deposit guarantee funds, etc. We
should focus on harmonizing processes, while models should be enriched with constrained
judgement as is standard practice in macroeconomic forecasting.
5. Fifth, there is a need to widen the scope of regulation. A crucial challenge ahead is related
to recent disintermediation and the development of "shadow" banking as an alternative
means of financial intermediation. The CRR/CRDIV legal framework covers mainly the
banking sector, yet financial activity and the financing of the euro-area economy have
increasingly shifted to non-banks. The need for macroprudential regulation of certain
financial activities becomes clear if we consider that banks and non-banks are closely tied
through market-based intermediation activities. These include a broad array of services
related to securitization transactions, securities financing transactions, repos, collateral
management and derivatives. The consequences of poorly-monitored risks in this area are
unknown and the risk of a new crisis could be lurking, while spill-over effects are difficult to
assess. Moreover, the more that policymakers are effective in using macroprudential tools to
constrain excessive credit growth in the banking sector, the more likely it becomes that there
will be excessive adjustments in the non-bank sector through leakages. Fortunately, "shadow
banking" is high on the agenda of the relevant fora and there is a clear need to extend the
regulatory toolkit.
At this point I would like to mention also the Capital Markets Union. The Capital Markets
Union aims at connecting saving more effectively to investment by funding projects in a
transparent and ordered way. In this way, it could contribute to growth by providing
alternatives to traditional bank intermediation for savers and investors. In pursuit of growth,
Europe needs a financial system that is able to meet the financing needs of all economic
entities (businesses and households) at different stages in their development.
6. A sixth challenge is one that the SSM has identified as a top priority for its supervisory
action plan for 2016 - namely, banks' business model and profitability. In particular, low
profitability in a low (even negative) interest rate landscape is a key challenge that banks
need to address. Moreover, European banks have to address the problem of radical
restructuring which has been delayed in many cases. This observation, accompanied by
frequent top management changes, stands in contrast to strategy implementation in the US.
It is even more complicated now with the deterioration in market sentiment and the
weakerthan-expected economic outlook.
Part of the challenge in addressing a new business model relates to the increasing stock of
Non-Performing Exposures (NPEs) and their management. These exposures are acting as a
significant impediment to banks' reorienting their business model as well as, more broadly, to
growth and financial stability, particularly in the countries of the European South. It should be
highlighted, however, that we are in a good position to deal with this challenging issue as,
thanks to the Comprehensive Assessment and the Asset Quality Review, we are aware of
the full picture and important knowledge has been acquired for both monitoring and
managing troubled assets. At the Bank of Greece, our research on the issue of NPLs
indicates that they are overwhelmingly driven by recession. Thus, additional capital
requirements cannot always provide a remedy. Indeed, in some cases such a remedy is
likely to prove sub-optimal. Instead, at my Bank we have concluded that active private sector
loan restructuring, the improvement in the insolvency framework, more efficient judicial
systems and the involvement of loan servicers and private equity funds with experience in
restructuring sectors of the economy are crucial components of an overall strategy of dealing
with NPLs.
7. A seventh challenge, the role of the central bank as a lender of last resort to the banking
system, needs to be addressed on the basis of principles that are consistent with our
mandate of preserving financial stability. The principle developed by Thornton and Bagehot
is well-known. Central banks should lend freely to solvent but illiquid banks against good
collateral at a high rate of interest. How is this tried and tested principle to be made
operational in today's environment with much larger bank balance sheets and fewer liquid
assets? In the past, government bonds were automatically considered good collateral.
Today, central banks accept a wider pool of collateral. By what criteria should collateral be
judged? We know that liquidity problems can become solvency problems if liquidity is denied
or not provided generously enough. Thus the seemingly simple principle developed by
Thornton and Bagehot can be open to various interpretations. There is a need, I think, to
revisit the question. Mervyn King's pawnbroker concept (2016) provides some new ideas on
the issue.
The ultimate aim in meeting these challenges is to make finance in Europe more resilient and
to enhance and safeguard financial stability. The role of supervisors of the financial system is
to enhance harmonization while respecting proportionality. They should safeguard a
levelplaying field among all participants and protect depositors while striking the right balance
between "strictness" and "fairness". Their mandate is to set clear boundaries within which
financial intermediation can prosper while financial stability is maintained.
F. Concluding remarks
The financial sector is facing challenges on many fronts. Banks are no exception. Jonathan
Hill (2015, 2016) recently spoke about "a brave new world for banks" and the need of a
revolution in which banks are reformed and restructured with respect to both their business
models and governance. Supervisors will also have to adapt to this revolution.
Despite the progress made in the past few years, with Banking Union as the flagship of the
reform effort, more progress is needed as Economic and Monetary Union (EMU) remains
incomplete. Divergence across the euro area is significant and the crisis of recent years has
further highlighted existing shortcomings and important differences that need to be bridged.
With respect to the financial system, we should seek an approach that promotes
proportionality, transparency and competitiveness. Regulatory consistency, coherence and
certainty are crucial to investors' decision-making process.
While financial stability is a necessary condition for prosperity in the euro area, it is not a
sufficient condition. To this end, Europe should build upon other proposals outlined in the
Five Presidents' Report (2015). As argued in that report, EMU will not be complete until the
appropriate mechanisms to share fiscal sovereignty are in place. Monetary unions have to
develop mechanisms for risk sharing. Mark Carney (2015) recently highlighted the stylized
fact that, whatever happens to asset prices, debt endures. Reducing debt levels is difficult
and he notes that it is unlikely that high debt in one sector or region can be reduced without
at least temporarily increasing it in another. Fiscal integration can help in this respect. Allow
me to remind you of Keynes's view about the Bretton Woods System - it needed, he
believed, to provide mechanisms to promote symmetric adjustment within the fixed exchange
rate area so that there would not be a bias towards deficient demand across the system. A
more-fiscally-integrated monetary union would help address the problems of asymmetric
adjustment and the deflationary bias of our monetary union.
Financial stability is a prerequisite for sustainable growth; it is also a fact, however, that
financial stability on a sustainable basis cannot be achieved without economic growth.
Failure to maintain sustainable growth has been the biggest threat to the long-term stability
of the EU since the onset of the 2007 crisis. An appropriate balance between managing risk
and enabling investment needs to be struck. In this connection, it is crucial that the regulatory
framework does not impede, but provides a suitable environment, for sustainable growth.
Ladies and gentlemen, ultimately, a sustainable recovery will need to be underpinned by
higher investment. Yet, in the euro area we presently face a significant investment gap. The
financial system and its stability have a crucial role to play in closing this gap. Central
bankers and supervisory authorities bear an enormous responsibility in shaping a system
that can deliver prosperity to the citizens of Europe. We have made important progress in
securing the financial stability needed to deliver such prosperity, but we have not yet
completed the job. As the ancient Greek mathematician, Archimedes, once