yves mersch : capital markets union – the “ why ” and the “ how ” dinner speech by mr yves mersch, member of the executive board of the european central bank, at the joint eib - imf high - level workshop, brussels, 22 october 2014. * * * dear mr tanasescu ( mihai tanasescu, board member of the eib ), ladies and gentlemen, in four days ’ time, the european central bank ( ecb ) will disclose the results of its comprehensive assessment of banks ’ balance sheets – what we have called a financial health check. this will mark the end of a tremendous effort by both banks and supervisors. around 6, 000 experts have been working full - time over the past twelve months to review the balance sheets of 130 banks in the euro area and lithuania. together, these banks represent roughly 85 % of total bank assets in the euro area. one reason you are here tonight may be not only the dinner but also that you would like me to let you in on the secret of the numbers we will publish at noon on sunday. i am afraid i have to keep you on the edge of your seats for four more days. before we can disclose the outcome, we have to give banks the opportunity to review their results and prepare for publication. that review period will start tomorrow. what we already know is that the banks that will fall under our direct supervision have strengthened their balance sheets by almost €203bn since the summer of 2013. this includes €59. 8bn of gross equity issuance, €31. 6bn issuance of contingent convertible bonds ( cocos ), €26bn of retained earnings, €18. 3bn of asset sales, €17. 6bn of one - off items and additional provisioning and about €50bn of other measures. these numbers show that even before the results are announced, the comprehensive assessment is delivering on its objective of repairing and strengthening banks ’ balance sheets as the ecb takes on its new supervisory responsibilities. but tonight, i would like to look beyond sunday to the bigger picture surrounding the comprehensive assessment. what some perceive as a burdensome exercise, analysing very technical aspects of bank balance sheets, is in reality a display of the ambition to create a more integrated financial market in europe. the comprehensive assessment is an important prerequisite and foundation for the single supervisory mechanism ( ssm ), which will start operating on 4 november. together, they constitute a sea change in

that using digital finance to enhance financial inclusion would boost gdp by between 9 - 14 % in large economies such as indonesia and the philippines, and up to as much as 32 % in cambodia. 3 / 5 bis central bankers'speeches global banks will continue to play an important role in the region, especially in wholesale banking and the intermediation of us dollar flows. but the onus largely falls on asian banks to expand financial inclusion, especially at the retail and small business level. using innovative fintech solutions, they can mobilise untapped savings and provide access to credit for under - banked individuals and businesses. asia is fertile ground for digital innovation in banking. in indonesia and vietnam, only around a third of the population is formally banked. yet, their mobile phone penetration rates are above 100 % – that ’ s more than one phone per person on average! coupled with a young and tech - savvy population, what we have is a ripe environment for mobile banking. and we are seeing interesting innovations across asia, bringing banking services to the broader population. in indonesia, the financial services authority ( ojk ) runs a branchless banking programme with participant banks. called laku pandai, or “ smart man ”, the programme offers banking and financial services to the under - banked, supported by mobile phones and it facilities. dbs bank is collaborating with peer - to - peer ( p2p ) lending platforms to cross - refer clients. dbs will refer to the p2p lenders some of the smaller businesses that it is unable to lend to. in return, the p2p lenders will refer borrowers who have completed two successful rounds of fund raising to dbs for larger commercial loans and other financial solutions such as cash management. the road to financial inclusion is neither short nor easy. but it is an important one. broadening access to financial services will offer asian banks – and fintechs – the opportunity to grow their business while serving a social purpose. financial inclusion will be a key priority in the economic co - operation agenda when singapore assumes the chairmanship of asean next year. conclusion you will be discussing many of these issues in the days ahead. i look forward to hearing your insights. it leaves me now to hand over to john williams for his keynote address. he will speak on us monetary policy – a subject of evergreen interest to the financial industry and central banks around the world. i look out for john ’ s speeches not so much