key question should be this : how can regulatory measures help to reassert fundamental market economy principles, first and foremost the no bail - out principle? how, for instance, can we make it possible for financial institutions to exit the market without endangering systemic stability and without the taxpayer having to foot the bill? what we need are insolvency frameworks that are in tune with the interconnectedness and complexity of the financial sector. even large and complex institutions need to be able to fail without bringing down the entire system. only when that is possible will the state no longer be forced to intervene at the taxpayer ’ s expense. thus, setting up a credible resolution mechanism for financial institutions can help to strengthen the no bail - out principle within the financial sector. major steps have already been taken in this regard at the international level. the financial stability board has already presented key attributes of effective resolution regimes for financial institutions, which were endorsed by the g20 heads of state and government in november 2011. since then, work has been under way to transpose this new international standard into national law. a draft directive for the recovery and resolution of credit institutions has now been presented at the eu level. this proposal clearly sets forth the sequence of liability for failing financial institutions – shareholders and creditors are now first in line, and rightly so. so we ’ re on track to reassert the no bail - out principle in the financial sector. but being on track doesn ’ t mean that we ’ ve already reached our final destination. the design phase of the regulatory reform has been concluded ; now it ’ s time for us to put the reforms into practice. that means following the path we've taken right through to the very end. bis central bankers ’ speeches first and foremost – and this is a crucial point as far as i ’ m concerned – all countries need to follow this path together. players in the financial sector operate in global markets, in integrated markets, so we need to make sure our regulation takes account of any crossborder interaction and coordinate regulatory measures internationally. in global markets, the rules of the game need to be global, too. the reforms endorsed by the g20 can only have the intended impact if they are fully and consistently transposed into national regimes. otherwise, evasive action or regulatory arbitrage might endanger their success. that ’ s why we will need to devote even more attention to the question of consistency going forward, particularly so given the impact of the

joachim nagel : the internationalisation of the renminbi – opportunities for german industry speech by dr joachim nagel, member of the executive board of the deutsche bundesbank, at “ bayerischer china - tag ”, ingolstadt, 19 october 2015. * * * ladies and gentlemen thank you very much for inviting me to the bayerischer china - tag. over the past few years, china has become a subject that has grown ever closer to my heart. in saying that, i am not just thinking about the steadily closer ties between our countries. on my trips to china, i have also constantly been noticing many things we have in common. germany is regarded in china – at least in my experience – as a very reliable partner and as a model in many kinds of issues. in particular, the german economic model with a strong mittelstand and the financial sector ’ s function of fundamentally serving the real economy are cited as models in china. speaking about china at the moment, we often first think of headlines such as “ slump in growth in china ” or “ stock market crash in shanghai ”. in my speech, i want to put those headlines into perspective and set them in the context of china ’ s ongoing opening – and, saying that, i explicitly do not mean just its financial and economic opening, but rather the overall transformation process in the chinese economy. i shall give a brief overview of the status quo and present the outlook for the future internationalisation of the renminbi and for what opportunities this will open up not only for large german enterprises, but also – and especially – for the small and medium - sized firms which are so important in germany and well regarded in china. following a long period of strong gains, stock prices fell dramatically in the summer of this year, first in july and then again in august. as i see it, the significant slump in prices on the chinese stock market represents, first and foremost, a correction of the preceding rapid increase. between mid - 2014 and june 2015, equity indices went up by around 150 %. for many market participants, this was a clear indication of an exaggeration. yet again, it became apparent that financial markets are not a one - way street – not even in china. since the capital market in china is still comparatively heavily regulated in comparison with other large economies, the direct wealth effects of the slide in prices were limited for foreign investors. that is because roughly only 3 % of the equities are