check on whether we have taken the systemic interactions between the various pillars of the international financial architecture into consideration in an appropriate manner. much remains to be done in this regard and, as i already said, this is no time for complacency. the ecb is keen to play its role fully in this respect, not only by participating actively in the g7, the g20 and the financial stability forum, and by being fully dedicated to the g10 group of governors, but also by calling, when necessary, for a larger, more comprehensive, more systemic view in a number of important fields. for instance, we suggested additional considerations of financial stability in the context of the international accounting standards board, and these have now been done to our satisfaction. third, further work also remains to be done to achieve full inclusiveness of emerging economies and economies in transition in the international financial architecture. the g20, as i said, is an emblematic illustration of this new feature, which was overdue. in the field of central banking, the global economy meeting gathering central bank governors of systemic industrialised and emerging economies all over the world is another major example of the new inclusive handling of issues that are both systemic and global. thank you for your attention.

luis de guindos : opportunities and challenges for the euro area financial sector opening speech by mr luis de guindos, vice - president of the european central bank, at the 22nd euro finance week, frankfurt am main, 18 november 2019. * * * i am honoured to open the 22nd euro finance week. we gather here every year to discuss the recent financial and economic developments in the euro area and beyond. as we are going to publish our financial stability review in two days ’ time, today i will focus on the health of euro area financial institutions and the opportunities and challenges they face in the current environment. i will also offer some policy considerations. opportunities and challenges for euro area banks let me start with euro area banks, which have been reporting persistently low profitability in recent years. the aggregate return on equity of the sector slightly declined to less than 6 % in the 12 months to june 2019. this weak performance is broad - based, with around 75 % of significant banks generating returns below the 8 % benchmark return demanded by investors for holding bank equity. poor profitability of course reflects both cyclical and structural factors. the current macro - financial environment in the euro area is challenging for euro area banks. the recent softening of the macroeconomic growth outlook and the associated low - for - longer interest rate environment are likely to weigh further on their profitability prospects. many market analysts are concerned about the drag on bank profitability that could result from the negative impact of monetary policy accommodation on net interest margins. and net interest margins are indeed under pressure. just focusing on this one aspect is misleading, however. importantly, it neglects the first - order effect of monetary policy in supporting economic activity. without this, bank lending volumes would have been significantly lower and provisioning costs substantially higher. these factors, together with the increase in asset values, have broadly offset the negative impact of low rates on net interest margins. in addition, the introduction of the two - tier system for reserve remuneration will help mitigate the cost of negative interest rates for banks. structural factors are at the heart of weak bank profitability, however. in particular, euro area banks face challenges linked to the sector ’ s overcapacity. there are too many banks. many of them have low market shares and so are under high competitive pressures, also from outside the sector, for example from fintech companies. another important dimension of overcapacity in the euro area is persistent cost inefficie