, the implementation of effective fiscalstructural reforms faces several tough challenges. first, they should preferably be part of a broad package of other necessary structural reforms. as such, the assessment of the potential impact on the economy is usually complex and requires a comprehensive approach. the technical expertise to make a correct assessment of the likely effects of reform is paramount for an efficient design. second, and closely related to the previous point, the planning of such reforms has to take into account the institutional and legal framework in each country. indeed, the political decision - making process, the type of government, the existing domestic laws, in particular at constitutional level, and external rules like those included in the stability and growth pact for european union members, are important aspects to be taken into account. sometimes, the improvement of this institutional and legal framework is in itself an important prerequisite for the feasibility and success of other reforms. third, the technical expertise required for the planning of reforms should have a strong base in the country implementing them, along with ‘ national champions ’ supporting the reforms on their own merits. domestic “ ownership ” is critical. reforms should never be understood by society as an imposition from abroad, either from the imf or from the european institutions. www. bportugal. pt fourth, careful attention needs to be paid to the communication strategy and redistributive mitigation measures. both are key to ensuring adequate support from the public and to containing populist appeals targeted at those parts of society that are potentially most adversely affected by the reforms. indeed, some of these reforms may involve long implementation periods, with transitional arrangements, and often lead to changes in the distribution of income and wealth. this may create pockets of discontent in spite of the clear overall benefits for the society. lack of understanding of these challenges by decision - makers may seriously jeopardise the expected outcomes. last but not least, the length of the political cycle often proves insufficient to provide the right incentives for the effective implementation of fiscal - structural reforms. therefore, broader agreements across the political spectrum, if possible, significantly increase the likelihood of reform success. however, by their nature and especially in those countries most in need of them, such agreements have been quite hard to achieve lately. all in all, i am convinced that sustainable public finances and better long - run economic performance pose significant challenges that should be tackled without delay. the longterm benefits of structural reforms decided today will far outweigh

carlos da silva costa : regulatory and supervisory institutional frameworks in europe opening remarks by mr carlos da silva costa, governor of the bank of portugal, at the seventh bank of portugal conference on financial intermediation, lisbon, 7 july 2017. * * * it is my great pleasure to welcome you to the 7th banco de portugal conference on financial intermediation. this conference series has taken place every other year since 2005 ( when it was called the “ conference on financial fragility and bank regulation ” ). it aims to bring together senior and young researchers from academia and central banks to discuss the most recent developments in financial intermediation, markets and regulation. back in 2005, awareness of the challenges ahead in terms of financial stability was already increasing. some key topics were becoming important in the theoretical and policy debate : rapid financial innovation in a context of international integration ; liquidity management practice and the associated systemic risk ; the role of central banks as lenders of last resort ; and the set of problems related to “ too big to fail ” financial conglomerates. when the international financial crisis began, followed by the european sovereign debt crisis and the vicious circle linking sovereigns and banks in several countries, these issues became a focal point. many new topics also joined the research agenda, such as : the misuse of the so - called originate - to - distribute model, in particular resorting to complex derivatives and other opaque products ; the pro - cyclical nature of the existing capital regulation framework ; the adequacy of financial regulation and supervision frameworks. banks were forced to adapt their business models and management strategies. in particular, the very low interest rate environment and the unconventional monetary policies conducted by the main central banks dramatically changed the operating environment and the incentives for banks and markets. at present, there are four key issues that in my opinion deserve the attention of policymakers and researchers : 1. the regulatory and supervisory framework an economy ’ s regulatory framework reflects society ’ s preferences in terms of risk protection. these preferences evolve over time and in tandem with them the supervisory regulatory framework. in the aftermath of the recent crisis, the public asked for stricter financial and supervisory regulations. this led to a significant change in financial regulation, guided by two main concerns : improving financial institutions ’ governance models ; reducing their degree of risk and creating capital buffers to absorb risk, should it materialise. 1 / 3 bis central bankers'speeches but more recently the idea that we have reached a point of overregul