credit risk – either by securitisation or credit derivatives – started to grow rapidly. the chance to sell or buy credit risk, instead of holding loans until maturity, placed banks under increased pressure to know the present values of their assets well before maturity. this posed a challenge to risk modeling as present values depend in a complex way on market factors like interest rates or exchange rates. therefore, it is not surprising that the growth of credit trade was accompanied by rapid technological progress, for instance, by the development of new credit portfolio models. it is difficult to say which came first or – in other words – whether these new risk measurement techniques were the egg and the increased credit trade the hen or vice versa. technological progress has continued up to the present day. the interaction of market and credit risk is being taken into account by more and more sophisticated models. the increased trade of credit on the one hand offers an opportunity to further diversification of credit risk over the whole financial system and to contribute to financial stability. on the other hand, it can also be seen as a development incurring new risks, be it by an inadequate recognition of risks inside a single bank, be it by new adverse risk - taking incentives or by the imperfection of hedges, be it, finally, by new effects that no one had discovered before. these developments are a first reason for bank managers, regulators and central bankers to improve their understanding of the interaction of market and credit risk. in addition to these developments, some industry representatives were concerned that diversification effects between market risk and credit risk were being ignored by regulators, which could lead to too high minimum capital requirements. a deeper understanding of diversification effects and their relevance for risk aggregation in banks is a second reason to have a conference on the interaction of market and credit risk. at the end of 2005, the research task force project group on the interaction of market and credit risk received the mandate, first, to collect and summarise information on the state of the art of measuring the interaction of market and credit risk, and second, to set up and to conduct its own research projects in a rather broad field. as this was a vastly unexplored research area, the new working group has become one of the most research - oriented groups of the research task force. ladies and gentlemen, this conference contributes to bringing together three groups involved with the interaction of market and credit risk : bank practitioners, regulators, and researchers. the need to make them exchange their ideas and

legal tender, like cash, which would make sense from my point of view. in autumn 2023, the governing council of the ecb will take a decision on whether to enter a preparation phase for the digital euro. the decision to launch the digital euro would also require the consent of the european co - legislators within the euro area. when people ask me when a digital euro would be ready for distribution among users, i remain cautious : we are talking about a minimum of three years, so probably not before 2027. 4 conclusion ladies and gentlemen, " bolstering confidence " calls for " high quality developments " in financial markets. without a doubt, a cbdc is just one of many steps towards making that a reality. but whatever digital developments play out, what matters is that financial markets continue to play their supportive role for the economy and society at large in the digital era. as a central bank, we are facing up to this challenge as a way of preserving long - term confidence in the single currency in europe in an evolving financial world. thank you for your attention. 1 ecb staff macroeconomic projections, published in early march 2023. 2 ecb publishes progress report on digital euro and study on possible features of a digital wallet ( europa. eu ) 3 see, for example, panetta ( 2023 ) : a digital euro : widely available and easy to use ( europa. eu ) 4 / 4 bis - central bankers'speeches