comprehensive treatment plan banks have become more resilient, but they do operate in an environment that is characterised by constant change and constant competition. in order to retain their resilience and preserve their profitability, banks have to change as well. most importantly, they have to rethink their business models. from our perspective as supervisors, the viability of business models is currently one of the main points of attention. while it is not our role to tell banks how they should operate, we must 1 / 3 bis central bankers'speeches warn them against the temptation to prop up their profits by taking on too much risk. an excessive search for yield could easily lead to new troubles for the banks themselves and the financial system as a whole. and against the backdrop of low profitability, abundant liquidity and high competition, this is not a purely hypothetical concern. as a result, we are not only scrutinising business models and profitability drivers, but are also taking a close look at risk management. this is reflected in our supervisory priorities today and for the coming years. in a nutshell, effective risk management rests on two pillars : sound governance structures and high - quality data. with regard to internal governance, we recently published the results of a thematic review. its conclusion : many euro area banks need to improve the way they conduct business and manage their risks in order to achieve international best practices. with regard to data quality, the “ principles for effective risk data aggregation and risk reporting ” published by the basel committee on banking supervision in 2013 are a suitable benchmark. we will closely monitor whether banks are applying these principles. another important issue in the context of risk management is the internal models that banks use to calculate their risk - weighted assets which, in turn, serve as a basis for determining capital requirements. for the next three years we will conduct a targeted review of these internal models in order to ensure consistent model outputs and restrict unjustified variability in the calculation of risk - weighted assets. through our review, we will gain in - depth knowledge of the internal models for credit and market risk used by european banks, as well as of their standards and best practices. we will put this knowledge to use for several objectives. our follow - up decisions, in particular when approving models and requesting improvements or add - ons, will contribute to a level playing field regarding the calculation of capital requirements. we will also use the knowledge we acquire to hone our supervisory expectations and our guidance for banks

, with a view to simplifying it and removing potential obstacles to its effectiveness. in particular, the functioning of capital and liquidity buffers warrants further consideration, and an assessment needs to be made of whether there is sufficient releasable capital in place to address future systemic shocks. specific attention may need to be paid to the non - bank financial sector, where the covid - 19 market turmoil revealed significant vulnerabilities. taking into account its growing role in financing the real economy and the interlinkages with the rest of the financial system, the sector needs to be made more resilient through regulatory reforms and the further development of a macroprudential approach. longer - term financial stability vulnerabilities have been also building up. the pandemic has left a legacy of significantly higher debt in non - financial sectors. residential real estate prices have continued to rise sharply in many euro area countries, underpinned by strong lending dynamics, which raises concerns of potential overvaluation. vulnerabilities in financial markets have also increased amid strong risk exposure and deteriorating liquidity at non - bank financial institutions. and in the banking sector, long - standing challenges associated with weak profitability and overcapacity may limit some banks ’ ability to invest to stay competitive in a more digitalised future. international crisis response global cooperation has been instrumental in our response to the pandemic so far, and this cooperation should continue. preserving trade openness and ensuring universal access to vaccines and treatments remains of key importance for a durable global economic recovery. support for the most vulnerable countries needs to remain high on the international agenda, also in view of the divergence in vaccination rates and limited policy space in emerging markets and low - income countries. in this context, the ecb welcomes the crisis response measures taken by the imf as well as the g20 debt service suspension initiative ( dssi ) and the common framework for debt treatments beyond the dssi. this support was further strengthened in august by the general allocation by the imf of special drawing rights ( sdrs ) of a historical magnitude, which is a strong signal of constructive multilateral cooperation helping the global recovery. we call for additional imf members to sign voluntary sdr trading arrangements to facilitate sdr exchanges and ensure the burden is adequately shared across a wider set of countries. we take note of the discussions on channelling sdrs to vulnerable countries. national central banks of eu member states may only lend their sd