the united kingdom. the eu needs to make sure it doesn ’ t fall behind on this score. that ’ s why we expressly welcome the initiatives which brussels has put forward here, and why the bundesbank is an active participant in this debate. we are, however, keeping a very close eye on ensuring compliance with the principle of risk orientation. this is a test that any new regulation in the field of sustainable finance has to pass. but another thing is clear : not every proposal floated at the european level in the past few months is fully baked and ready to be served up to the real world. for this reason, institutions and associations also need to play their part in greening europe ’ s financial sector. shaping, and taking the long view, are also at the heart of my third and last point : designing the european financial centre post - brexit. i am convinced that we need a european strategy to deepen and modernise the internal market for financial services. our objective should be an interconnected european financial market which not only spurs competition internally but is also a global force to be reckoned with. i ’ m hoping for a financial ecosystem which is spread out over several sites and in which national, regional and local specialisation is possible, yet where actors and services are part of a single, interconnected market. such an internal market would be able not only to close the gaps created by london ’ s departure : such a joint financial centre would also help keep significant financial flows under european supervision and enable us to ensure the protection of financial stability thanks to our high supervisory standards. all these considerations on what comes beyond the capital markets union during the next european legislative period need to be priority issues which the second panel will discuss after lunch. 5 moulding the future 6 / 7 bis central bankers'speeches ladies and gentlemen, albert einstein is credited with saying that “ i ’ m more interested in the future than in the past, because the future is where i intend to live. ” a change of perspective towards the future can help us to put into perspective the numerous challenges facing banks and savings banks now. out of the many pertinent topics, i have touched upon nine. some topics that are still the subject of lively debate today might be self - evident five years down the road – think of basel iii. other topics which are already on the agenda today will not be nearly as easy to consign to history – think of structural change and digital transformation. and other topics

resolvable, and what would happen in a resolution. this will ultimately help the uk banking system function more efficiently by allowing the public and investors to hold banks more effectively to account, with the confidence that any failure, should it occur, be more orderly. the raf is an inherently flexible framework. the focus is on banks and building societies to do what may not come naturally – confront the difficult and complex judgements required in a resolution in advance and plan for them. identifying and having flexible capabilities that give the authorities options to respond to a range of failure scenarios, rather than asking them to address a specific one, is important. this is because it is inherently difficult for firms to predict which stress might tip them into failure. firms will need to ensure that they are embedding robust assurance, governance and oversight arrangements within everyday processes so that they are always ready for the unpredictable. this is particularly important given that resolution is not something which we will have a second chance to deliver. framing our approach around the three outcomes requires firms to think holistically and ask : “ how will we be able to keep the business operating, while losses are borne by investors, and restructuring occurs? ” this is more fundamental than just complying with individual policies or submitting data to authorities, and helps ensure that capabilities can be sustained for the long - term. we have also been flexible in our application of the raf. in may 2020, in recognition of the operational burden on firms arising from the covid pandemic, we extended the submission deadline for firms ’ first reports by a year. 19 see statement by the bank of england and prudential regulation authority on resolution measures and covid - 19 all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice the raf is also designed to be proportionate. i am quite conscious that i have dedicated a large chunk of my remarks focussing on larger banks and building societies – however being able to fail in an orderly way is a concept which speaks more widely than this – and is something which all firms need to take into account. the uk regulatory regime is not designed to ensure that no firm ever fails. having a competitive market means lowering the barriers to entry and exit ; the orderly failure of a firm with minimal financial stability implications is a natural part of an efficient economy. this is why we have modified insolvency rules for less systemic firms, which include an explicit objective to