With regard to money market funds, European regulations have made it possible to strengthen their resilience to the risk of a sudden and massive investor retrenchment, and increased liquidity and 2/7  BIS central bankers' speeches  transparency requirements have been in place since January 2018. Securitisation, which in 2008 may have appeared to be a factor for crisis propagation (via subprime lending), has been subject to new prudential rules, making it possible to better mitigate its risks while promoting the sound development of this instrument. The new European framework creates a label to identify high quality securitisation transactions, which meet the criteria for simplicity, transparency and standardisation (STS label). 1.2 THE IMPLEMENTATION OF THESE REGULATORY CHANGES COMBINED WITH FINANCIAL INTERMEDIARIES’EFFORTS TO ADAPT, HAVE GENERATED TANGIBLE SIGNS OF INCREASED FINANCIAL SYSTEM RESILIENCE. For the financial system, I would like to give three examples:  (a) Significant improvement in the solvency and liquidity of banks The own funds of major French banks have almost tripled since the crisis. Their Common Equity Tier 1 (CET1) ratios increased from 5.8% to 13.6% between 2008 and 2018. European banks have improved their short-term liquidity ratios, catching up with or even outstripping their international peers as from 2015. The long-term liquidity ratio for European banks is changing more slowly but, at the end of 2018, stood at around 110%, a level higher than that required under Basel rules. As regards insurance, the introduction of Solvency II has also resulted in an overall increase in the own funds of European insurers.

What is more, monetary policy and low rates also have positive effects for banks, such as a reduction in their cost of risk and increase in their lending volumes. However, the fact remains that the current environment is compressing net interest margins for retail banks, which finance themselves with deposits – and not at variable rates in the markets – and is lowering returns on insurers’ investments. The second risk, which is more structural, is the digital transformation of finance, which is revolutionising modes of use and bringing significant benefits to customers. However, adapting to this change requires huge investment by banks, to adjust their information systems and develop new, personalised service offerings. The digital transformation is also putting downward pressure on revenues due to increased competition from new market entrants (neobanks, GAFA, etc.). In response to this, financial institutions need to unleash new productivity gains, by exploring even further the possibilities of automation and artificial intelligence (AI), and adapting their branch networks on all levels (size, , density). The digital transition is also leading to a rising threat of cyber risk and, more broadly, operational risks (large-scale theft, data corruption), to which financial institutions are more than ever exposed. 4/7  BIS central bankers' speeches  Last, financial intermediaries also have to adapt to a new imperative – the need to take account of the risks linked to climate change, which I shall come back to later.