second quarter of 2019. data on bilateral fdi assets of us companies in the euro area offer insights on the changing nature of euro area fdi liabilities. between 2003 and 2018, us fdi positions in the euro area increased by a factor of 4. 5 ( chart 9 ). a striking pattern is that this increase was largely driven by us investment in holding companies in the euro area, which are often spes, while us fdi in other, more traditional sectors such as manufacturing, grew more modestly. chart 9 us foreign direct investment assets in the euro area by industry of euro area affiliate ( usd billions ) source : us bureau of economic analysis. notes : the euro area is based on data available for austria, belgium, finland, france, germany, greece, ireland, italy, luxembourg, netherlands, portugal and spain. the latest observation is for 2018. a forthcoming ecb study suggests that the income recorded on us fdi assets in the euro area plays a decisive role in the asymmetries observed in the bilateral euro area - us current account balance ( chart 10 ) that i mentioned earlier. the likely drivers of asymmetries in fdi income are, first, the difficulty in recording reinvested earnings of us mnes with complex ownership chains ( including holding companies ) and, second, the problems in properly allocating the income flows geographically. differences in the information set on mnes available to european and us statisticians may be an important factor behind these patterns. chart 10 bilateral euro area - us foreign direct investment income flows ( eur billions ; 2018 ) sources : ecb and us bureau of economic analysis data. note : positive balance indicates a surplus for the euro area. going beyond fdi, a careful interpretation of cross - border statistics is also needed for appropriate risk assessments and policy analysis related to international financial exposures. data on international financial transactions and positions have improved significantly over the past decade, both in terms of coverage and available details as regards instruments, sectors and geographic breakdowns. [ 13 ] such data are helpful for identifying the holders and issuers of financial instruments. this, in turn, matters for the analysis of the transmission of shocks and the stability of investment positions over time. however, even these additional details cannot fully reveal the matrix of linkages between the ultimate investors and the ultimate issuers of financial instruments. the identification of ultimate exposures has been further complicated in recent years by the rise of international financial intermediation chains, which

let me say briefly that the largest european banks have strengthened their robustness during the last two years and are, at least, as robust as their us peers1 : • the top european banks have seen their revenues increase by 8. 6 % on average from 2009 to 2010 ( up 2. 5 % for the main us banks over the same the following figures are based on calculations made with a sample of 17 large european and american banks : jp morgan, wells fargo, bank of america, citigroup, goldman sachs, morgan stanley, hsbc, rbs, barclays, santander, bbva, bnpp, sg, groupe credit agricole, ubs, credit suisse, deutsche bank. bis central bankers ’ speeches period ). all banks have benefited from a decline in their costs of risk ( – 43 % for us banks and – 30 % for european banks, from 2009 to 2010 ). but in absolute terms, the cost of risks amounts to eur 63 bn for the top 4 us banks, as opposed to only eur 58 bn for the 11 largest european banks. – • solvency ratios have significantly improved in europe, banks have retained earnings and increased capital through various ways ( new equity issues, dividends paid in new shares ) ; • with tier 1 ratios comprised between 10 % and almost 18 % for the main european banks, they are equivalent to the range of 11 % – 16 % of american banks. • regarding now the core tier 1 ratios, which is the measure displayed by banks for the markets, they are also pretty equivalent. again, with ratios ranging between 8. 5 % and 15. 3 %, the main european banks are as solid as us banks ( with ratios between 8. 4 % and 13. 3 % ). secondly, the differences in the leverage ratios levels mainly result from accounting discrepancies that can lead to particularly misleading comparisons : • if we observe the leverage multiples, it is true that the figures displayed by us banks ( between 10 % and 14 % ) are lower than those of most of european banks. for the latter, the range is much wider ( between 15 % and 25 % ). • but we all know that the measurement of the leverage ratios is significantly impacted by different accounting treatments, the main differences between ifrs and us gaap arising from the netting of derivatives and repos. • the example of deutsche bank is a case in point to illustrate this impact. at the end of 2010,