4. the form that “ greater proportionality ” should not take and yet, unfortunately, there are also a lot of less convincing ideas being put forward. before i come to the good ideas, i would first like to talk about the form that “ greater proportionality ” should not take. some proposals from the financial sector leave me wondering whether they actually represent the interests of the banks and savings banks, as well as their employees. this is because we see occasionally a contradiction in the proposals – the contradiction that institutions complain about having less and less time to devote to retail business as a result of regulatory requirements, on the one hand, while the lists of demands that they present largely focus on reducing minimum capital and liquidity requirements, on the other. bis central bankers ’ speeches instead, the proportionality debate ought to tackle the issue of operational burdens. in my view, this is the appropriate starting point for all other considerations. consequently, the concept of “ greater proportionality ” should not morph into an opportunity for institutions to present their wish lists. this means that we should systematically examine the areas in which regulation is not sufficiently proportionate and that we must consider how we can systematically improve this. what this does not mean, however, is that a patchwork of wish lists should be incorporated into existing regulation. notably, simplifications of minimum capital and liquidity requirements cannot and will not be granted. in contrast to what is commonly argued, lower capital requirements do not automatically lead to elevated growth, nor do they only result in increased lending. furthermore, simplifications must never endanger financial stability. medium - sized, highly systematically interconnected institutions – those referred to as “ too interconnected to fail ” – and those institutions with risky business models should not benefit from any simplifications. the recent financial crisis, during which many insolvent institutions had to be bailed out, is still fresh in all of our minds. additionally, institutions – irrespective of their size – must not be given systematic scope for regulatory arbitrage. in other words, exceptions to the rule must not create incentives for smaller institutions to conduct a greater volume of risky transactions. proportionality is not intended to make it easier for small institutions to use highly complex procedures and adopt risky business strategies as a result of being shown leniency. with that in mind, i would like to provide you with an example that applies to many institutions. some institutions, despite being quite small in terms of

than they were just a few years ago. all in all, then, the expected interest rate reversal in the united states is unlikely to impact strongly on german banks – and it ’ s not as if the move is coming entirely out of the blue. and that ’ s a point worth noting, because there are three qualities that are crucial for any exit from an accommodative monetary policy – transparency, predictability and communication. we are unlikely to see a turnaround in euro - area interest rates in the near future. in closing, i would like to quote again from the alan parsons project : “ someday, you ’ ll know where you are ”. thank you for your attention. bis central bankers ’ speeches