gediminas simkus : pillars of resilience amid global geopolitical shifts opening remarks by mr gediminas simkus, chairman of the board of the bank of lithuania, at the bank of lithuania's annual economics conference on " pillars of resilience amid global geopolitical shifts ", on the occasion of the 10th anniversary of euro introduction, vilnius, 16 december 2024. * * * check against delivery gerbiamasis js ekscelencija lietuvos respublikos prezidente gitanai nausda, gerbiamasis finans ministre rimantai sadziau, gerbiamieji seimo nariai, vyriausybs atstovai, garbs sveiai, ponios ir ponai, nuosirdziai sveikinu visus susirinkusius lietuvos banko ekonomikos konferencij. renginys neeilinis. jis skirtas euro, ms bendrosios valiutos, desimtmeiui lietuvoje paminti. renginys tarptautinis, todl dabar pereisiu prie angl kalbos. dear president of the european central bank christine lagarde, dear member of the european commission valdis dombrovskis, governors, ambassadors, esteemed guests, ladies and gentlemen, it is my great honour and pleasure to welcome you to this historic venue. we are at the palace of the grand dukes of lithuania. since the early days of the grand dutchy, a predecessor of modern lithuania, the palace has stood as a geopolitical and economic centre. the occasion that gathers us today is very special. 10 years ago, lithuania joined the euro. which is also both an economic and geopolitical landmark. therefore, the topic of today's conference – pillars of resilience amid global geopolitical shifts – is not accidental. it is an invitation to reflect on the most pressing challenges to lithuanian and european economies. and, most importantly, how we can overcome them. the euro area accession does not happen overnight. or, as lithuania's experience proves, by trying once. economic and legal criteria are rigorous, making the accession a demanding journey. during this journey, both actions and words matter. i would like to extend my sincere gratitude to you, christine. for your support and consistent vision

topics related to the covid event, including our interim findings on the lessons learned. the findings of that report, to be finalized later this month, will drive our future work agenda. let me share a few of my own views on the key lessons learned. my first takeaway is that the global financial system entered the latest crisis more resilient than the last. although extraordinary support measures were still necessary to mitigate the impact of the covid event, the implementation of the g20 - endorsed reforms from the last crisis helped contribute to our shared resilience. basel iii, which has led to a near doubling of capital ratios since 2011, positioned banks to better absorb the macroeconomic shock. in addition, derivatives markets are safer with better transparency, central clearing, and margin requirements. my second observation from the covid event is the importance of policy flexibility for each of our jurisdictions. of course, baseline consistency across standards is necessary. but indeed, one size rarely fits all. our varied policy needs and tools make coordination even more important to achieving common goals and results. the global regulatory framework, done right, is like a tightly woven piece of fabric. it can get pulled in different directions at the same time, and it won ’ t shred or unravel. in times of crisis, the warp and woof of policy tools across the globe need to be woven tightly enough for the fabric of our financial system to withstand the stress, but flexibly enough that it will not tear. uncoordinated regulation can create flaws : gaps, fragmentation, and arbitrage opportunities, which are the types of defects the fsb strives to prevent. but excessively granular harmonization can create regulation that doesn ’ t jibe with the circumstances in a particular jurisdiction. we try to ensure that our members are weaving a strong fabric in concert. a third observation is that there are instances where policy may fail to have the desired effect. i 3 / 5 bis central bankers'speeches found banks ’ apparent reluctance to use buffers an interesting lesson from the covid event. some evidence suggests that banks may have been hesitant to use their regulatory capital buffers to meet credit demand ( despite the stated intent from supervisors that banks should use their buffers under stress ). this may be due to uncertainty regarding potential future losses or the wider market stigma that may result if a bank were to use its buffers. perhaps the extensive fiscal and monetary support provided to borrowers averted banks ’ need to