union collapsed, eastern europe broke free, europe was united and china was integrated into the world economy. the world became a safer and more prosperous place to live – for a while. 1 / 3 bis - central bankers'speeches now, sadly, we are moving in the opposite direction, towards a new cold war and a breakdown in international cooperation. autocracies like russia and china are forcibly challenging the rules - based international order. the security policy environment of europe is being transformed as fundamentally as it was 30 years ago, only this time in reverse. the current geopolitical headwinds are detrimental also to the world economy. in the last few years, some have even predicted the end of globalisation. fortunately, the rumours on the death of globalisation have thus far proven to be exaggerated. in fact, the volume of world trade has already surpassed its pre - pandemic levels and is now close to its record level. at the same time, however, protectionism and friend - shoring are increasing and supply chains are being shortened. in the world of high geopolitical tensions, strengthening and maintaining the resilience of the financial system has become ever more important. to make the financial system safe and resilient, we need rigorous financial regulation and supervision. we also need high - quality macroprudential analysis and policy – another of the key topics of this conference. several sessions and presentations of this event are devoted to the analysis of the impacts of different macroprudential measures – both borrower - based and capitalbased measures – on households and banks, housing and labour markets, and even on tackling climate change. let me try and complement the forthcoming presentations with some thoughts on how macroprudential policymaking in europe could potentially be improved. first, it would be useful if the application of the capital - based macroprudential tools, especially the so - called o - sii buffer requirements, was based on more uniform criteria across the eu. in highly integrated banking markets, banks with equal or close to equal systemic importance should not have very different capital buffer requirements. similar application of tools would foster a level playing field and reduce any pockets of vulnerabilities. second, in the longer term, the borrower - based tools targeting housing loans and household indebtedness should be based on some minimum and common eu level requirements. at the moment, those tools are solely based on national legislation and are rather diverse across countries. in addition to credit

whether macroprudential policy should be formally part of the central banks ’ mandate as mostly exegetic, even theological – macroprudential policy is de facto the second pillar now, and de jure this fact has in europe been anchored in the eu ’ s secondary legislation, both as to the role of the financial supervisory authorities in the member states, and of the european systemic risk board. need for a better policy mix moreover, many of the challenges we face are beyond the mandates of central banks. better policy coordination – or policy mix – is key for better economic outcomes, especially since the monetary policy space is limited. the challenges in the domain of governments and fiscal authorities are both long - and short - term in nature. good examples of long - term structural issues are competitiveness and climate change. to deal with them, structural reforms need to be harnessed to boost productivity and the euro area ’ s growth potential and to reduce structural unemployment. fiscal policy can affect economic activity in the short term. that ’ s why automatic stabilisers should be able to play their full role. moreover, while euro area economies have different fiscal constraints, fiscal measures should be actively pursued in countries where fiscal space is available. such measures should be aimed at growth - enhancing public investment. in this endeavour, further development of the euro area financial architecture plays an important role. we need to finalise the banking union and make true progress with the capital markets union. moreover, sustainable finance will play a major role in the development of european capital markets. the european green bond market is the single largest green bond market in the world and the european investment bank is one of the largest multilateral providers of climate finance worldwide. ladies and gentlemen, to sum up : due to the prolonged pervasive uncertainty, we expect a period of slower growth – but no recession. inflation is projected to remain subdued. that ’ s why monetary policy will remain accommodative for an extended period of time. moreover, a strategy review is an opportunity to enhance common understanding and consistent communication on monetary policy. concerning flanking policies, macroprudential policy needs to be active and widen its toolbox, and we need a better policy mix where fiscal policy and structural reforms carry more responsibility for productivity and growth, so that monetary policy will not be the only active player in the field. and finally, we need to intensify the reform of the euro area architecture to make it more resilient before the next recession. many