lending to sovereigns as well. simply doing away with the zero - risk weighting will not suffice. banks ’ exposures to their respective sovereigns are often too large. capping the amount of debt issued by a single sovereign that a bank can hold does not necessarily mean that a bank will hold less sovereign debt in all. it can still buy the debt of other sovereigns, up to the individual limit. but what it does mean is that banks cannot put all their sovereign eggs into one basket, so to speak. and this will go a long way towards ensuring that a sovereign debt restructuring will not bring down a country ’ s national banking system. besides, there is no compelling economic argument why banks should be the main financiers of sovereigns in the first place. banks ’ long - standing ties with their private clients allow them to glean information about firms and managers. this information allows banks to allocate capital more efficiently than other intermediaries who lack this information. in so doing, banks create value for the economy as a whole. however, banks do not have such privileged information on the debt of a nation – especially on the debt of central governments. it makes sense for banks to hold a certain amount of sovereign debt for liquidity purposes. but there is no reason why the financing of states should not be more of a matter for the capital markets. doing away with the regulatory privileges afforded to sovereign debt would force the markets to take more into account the differences in sovereigns ’ risk profiles. for countries that pursue unsustainable policies, this would mean rising risk premiums. and as a last resort, a sovereign debt restructuring would be possible without bringing down the financial system. however, changes are in order not only with regard to the capital regulation of sovereign bonds. in a framework of individual responsibility, we need to make sure that responsibility rests with those who assumed the risks in the first place. as it is, a member state that loses market access can apply for an esm rescue programme that combines financial assistance with economic reform. if things work out as planned, deficits are brought down, growth capacity is raised, and market access is restored. however, if things do not work out as planned and the member state does not regain market access, the only way out might be a restructuring of the debt burden. but by then, the bis central bankers ’ speeches european taxpayer has already picked up part of the check, as private bond holders have been

€1 billion of our provisions for general risks. last year, policy rates were still at all - time lows until july. the financial burdens resulting from the increase in interest rates have therefore been limited thus far. the burdens on the bundesbank's profit and loss account are likely to increase considerably in the years to come. tapping into the provisions for general risks for 2022 reduces this item to €19. 2 billion. the statutory reserves of €2. 5 billion are available as an additional buffer. there is a high degree of uncertainty associated with the persistence and scale of the financial burdens the bundesbank is facing. on the basis of various calculations, our risk provisions are likely to still be sufficient this year, too. in subsequent years, however, the burdens will probably exceed our financial buffers, in which case we will report a loss carryforward. the bundesbank already did this back in the 1970s. this is therefore nothing new. with the help of future profits, we will then offset the loss carryforward over the course of time – as was already done in the 1970s. the bundesbank's balance sheet is sound. ladies and gentlemen, 6 / 7 bis - central bankers'speeches as the bank for international settlements recently put it clearly in a paper on central bank losses : " unlike commercial banks, central banks do not seek profits, cannot be insolvent in the conventional sense as they can, in principle, issue more currency to meet domestic currency obligations, and face no regulatory capital minima precisely because of their unique purpose. " 2 it is our mandate to safeguard price stability. we must fulfil this mandate, and we will fulfil this mandate. earnings developments now and in the coming years are ultimately the result of the exceptionally accommodative monetary policy of the past few years. now, a tight monetary policy is needed in order to restore price stability in a timely manner. if this entails financial burdens, we will have to – and will be able to – cope with them. the burdens will pass, and we will be able to subsequently start making profits again. the eurosystem must now do what needs to be done. and now i will hand over to joachim wuermeling, who will present further details on our annual accounts to you. 1 see, for example, weidmann, j., introductory comments at the financial statements press conference 2016, 23 february