1/7  BIS central bankers' speeches  Since the summer, there has been a series of negative surprises: a resurgence of trade tensions between the United States and its partners, notably China; tensions surrounding the Italian budget; the British parliament’s rejection of the Brexit deal; and, closer to us, the scale and duration of the so called gilets jaunes movement. This climate has weighed on the macroeconomic environment, which is now unquestionably less favourable than anticipated a few months ago. According to the IMF, global growth could slow to 3.5% in 2019 from 3.7% in 2018. France’s economic growth is also slowing, albeit to a lesser extent than in other European countries thanks to a rise in purchasing power and robust domestic demand. In 2019, France should grow at a pace faster than in Germany, and close to the average pace for the euro area. This context of uncertainty exacerbates risks already faced by financial intermediaries. Debt levels among economic agents remain high. This is particularly true for France where debt has been rising consistently over the past fifteen years, and now stands at 75% and 60% of GDP respectively for non-financial corporations and households – in stark contrast with the trends observed in neighbouring European countries and other advanced economies. The downward revision to growth forecasts raises even greater concerns over the sustainability of this debt and the amplifying role it could play in the event of an upward shock to interest rates or a downward shock to activity.

Even though handling procedures for credit claims are sometime more cumbersome, counterparties show an increasing interest for this asset class with very low opportunity cost. The bottom line of these figures is that the increasing use of lower opportunity cost collateral shows that a growing number of counterparties are becoming more active and efficient in managing their collateral, and thus their liquidity. Finally, the recent market turmoil provided tangible evidence that the collateral framework of the Eurosystem is broad enough to ensure that counterparties do not face collateral shortages, even in difficult situations. Where do we stand today? The degree of uncertainty concerning risk – where is it?, how much?, at what price? – is declining with every forthcoming disclosure. Some asset classes have already fully recovered their risk appetite. Bank profits will be impacted, but their capacity to absorb adverse developments has also been strengthened by buoyant results over the last years. However, we are not back to normal yet, especially in the unsecured interbank term money market. We are not fully safe from a low probability but potentially high impact negative event. Before drawing some tentative lessons, let me add that there is no trade-off between liquidity provision and monetary policy, with its primary objective of maintaining price stability to which we are resolutely attached. III. Key issues  At the international and at EU level a tentative agenda is emerging around 4 axes for further examination. First: Transparency Enhance transparency for investors, markets and regulators (including improvements at the level of data reporting).