single resolution board, both of which are functioning. the participants are currently discussing the collaboration under the heading of " risk reduction and risk sharing. the heading is not wellchosen, as it gives an impression of a " quid pro quo " mindset. in reality, the " discussion " comprises a number of elements that are all wellfounded, also when viewed separately. the discussion has been organised, e. g. via the development of a set of indicators for the soundness of the banking sector. these may be of separate interest, but will also be used as criteria for the development of the potential european deposit insurance scheme, edis – which i will return to later. risk reduction as in this country, banks in the rest of europe are also benefiting from the stronger economy and the efforts to clear up the mess left by the crisis. return on equity has risen despite a slightly depressed interest margin, but with considerable variation between member states. the german banks stand out with relatively low earnings. there has been consolidation within the sector, as also seen in denmark. the european banks are better capitalised. this is because they hold more capital, but also because their risk weights have fallen. ( this reflects an improved cyclical position and better credit management, but also the discontinuation of weak banks and divestment of non - performing loans. ) liabilities are also being issued to meet the mrel ( minimum requirement for own funds and eligible liabilities ). observance of the mrel is to ensure that eligible liabilities can be written down or converted into equity in a reasonably orderly manner if the institution is failing and is systemically important. in that case, it must be recapitalised and continued in a new form. it will take some years before the mrel is fully built up. in side 4 af 9 denmark we have also begun to build up mrel funds, although no mrel requirement yet applies to mortgage banks, as you will know. as regards liquidity, it has been agreed to apply the two liquidity ratios, lcr and nsfr, as indicators. the lcr has, on average, increased considerably in most member states, and the distance to the 100 per cent requirement is increasing. the nsfr requirements are also generally met. the spread in the share of non - performing loans has been a significant barrier in relation to encouraging the economically strong member states to engage in more risk sharing. in terms of legislation and pract

mario draghi : imfc statement statement by mr mario draghi, president of the european central bank, at the thirty - ninth meeting of the international monetary and financial committee, washington dc, 12 april 2019. * * * the euro area economy expanded at a slower pace in 2018, following robust growth in the previous year. the economy grew by 1. 9 % in year - on - year terms, marking a sizeable moderation in the pace of economic expansion. while there are signs that some of the idiosyncratic domestic factors dampening growth are fading, global headwinds continue to weigh on euro area growth developments. the persistence of uncertainties, related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, is leaving marks on economic sentiment. at the same time, the economy continues to exhibit a high level of capacity utilisation, and the unemployment rate in the euro area has continued its downward trend, falling to its lowest level since october 2008. the number of people in employment has increased by more than ten million since mid - 2013. nevertheless, since the annual meetings in october 2018, incoming data have been weak, in particular in the manufacturing and tradable goods sectors, reflecting a slowdown in external demand. this was compounded by some country and sectorspecific factors that are turning out to have somewhat longer - lasting effects than previously expected. our monetary policy measures continue to support domestic demand, which remains the backbone of the euro area ’ s economic growth. private consumption is driven by employment gains and rising wages. although business investment has lost some momentum, economic fundamentals remain supportive ; high levels of capacity utilisation, together with favourable financing conditions and robust demand, are expected to continue to further support investment. in addition, the expansion in global activity is expected to continue, although at a slower pace. since the annual meetings, short - term economic projections have been revised downwards. the latest ecb staff projections put annual real gdp growth at 1. 1 % in 2019, 1. 6 % in 2020 and 1. 5 % in 2021. at the same time, the persistence of uncertainties related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets poses downside risks to the euro area growth outlook. headline inflation in the euro area has lately been hovering around 1. 5 %, somewhat lower than in the summer of last year, when it was around 2. 0 %