. 1 / 4 bis - central bankers'speeches as we do so, and look ahead to possible future systemic threats, it is important to start with the broader macro - financial backdrop. because shocks never happen in a vacuum. for much of the past 15 years, financial conditions have been highly accommodative. this spurred risk taking. at the esrb we sometimes called it the'hunt for yield '. a hunt in which some financial institutions relied on business models based on the presumption of low and stable interest rates. an old banker's adage states :'it's not the speed that kills, but the sudden stop'3. so, with those accommodative financial conditions coming to a swift end, the vulnerabilities that developed during the'hunt for yield'could be crystalised. financial markets and indeed regulators did not fully anticipate the'sudden stop '. but, both the esrb and the fsb had been warning about the developing vulnerabilities for some time. there was bound to be transition risk for financial institutions and the system at large when coming from such a long period of low interest rates. today, we find ourselves in that transition phase. at the same time, there is limited fiscal space in many countries. this is the consequence of elevated public debt, alongside a higher interest rate environment. and, of course, until inflation is returned to target, monetary policy space is similarly constrained. thus, the scope to lean against an economic downturn is more limited than in the past. for this reason, financial policy makers need to be especially vigilant. with this backdrop in mind, let me now turn to the recent disruptions affecting the global financial sector, across both banks and non - banks. as i said, in the aftermath of such events, it is important to draw the right lessons and to respond. the fsb is working hard on both. earlier this year, the banking sector saw the most significant system - wide stress since the gfc, in terms of both scale and scope. a global systemically important bank in switzerland had to be rescued, and several medium - sized us - based banks failed. these events highlighted a number of issues for financial stability : first and foremost, the importance of banks'own risk management and governance practices was again brought to the fore. second, we witnessed an unprecedented speed of bank runs. this underscores the growing impact of technology and social media

built, all governors will remain equally involved in future monetary policy decisions. however, they may not all have a vote at the same time. moreover, the participation of ncb - governors will continue to offer checks and balances and enhance the quality of decision - making. let me turn to the guiding principle of subsidiarity. clearly, the principle implies that, to a large extent, the spokes of the system take care of both inputs and outputs. given the heterogeneity of the euro area, this bottom - up approach to system tasks makes sense. thus, in dealing with economic, structural, or even linguistic differences and national preferences, the spokes are better positioned in the operation of monetary policy. the same goes for managing payment systems or the collection of statistics – tasks that i will leave aside for the moment. moreover, governors and their respective central banks bring in specific local knowledge and enhance healthy competition within the system – for example in the area of research. of course, as explained, we should be conscious of potential trade - offs between subsidiarity and the guiding principle of efficiency. as such, there is no denying that efficiency gains can be achieved in the production and distribution of banknotes. we need to pursue these possibilities. financial stability and banking supervision – national tasks of ncbs this brings me to the central bank tasks that fall outside the exclusive domain of the european system of central banks. for the dutch central bank, these tasks take up around half of its staff and relate to international financial relations, advising the government, financial stability and banking supervision. under the subsidiarity principle, these responsibilities lie close to the sovereignty of the nation state. nevertheless, there are clear links and synergies with the tasks of the european system of central banks – which, in fact, is an important reason for national central banks having these tasks. let me limit myself here to financial stability and supervision – given their importance in recent european discussions. according to the treaty, the european system of central banks as a whole shall contribute to the smooth conduct of policies pursued by competent authorities in the field of prudential supervision and financial stability. the collective responsibility to contribute to these policies follows from the financial stability task of the national central banks. this involvement in financial stability is a natural reflection of other tasks, including monetary policy, payment systems and – to varying extent – banking supervision. monetary policy relies on financial stability in order to be effective. in addition, in exercising oversight