mugur isrescu : opening remarks – the international 2023 ermas conference welcome address by mr mugur isrescu, governor of the national bank of romania, at the ninth edition of the annual scientific conference of the romanian academic economists from abroad, the 2023 ermas conference, organised in partnership with the bucharest university of economic studies, babe – bolyai university cluj - napoca and ermas association, bucharest, 26 july 2023. * * * distinguished audience, ladies and gentlemen, it is my pleasure to wish you the warmest welcome at the national bank of romania, for the ninth edition of the annual scientific conference of the romanian academic economists from abroad – the ermas conference. on behalf of the board of the national bank of romania, i wish to congratulate the scientific committee for their professionalism and the remarkable program they have put together. allow me to extend our greetings to all our partners and their contribution to organizing this top event in academia. i recall with great pleasure the first edition of the ermas conference back in 2014 when i had the honor to be a keynote speaker. i remember the excellent quality of the ideas and of the papers presented. we meet again today for the ninth edition, jointly organized by the national bank of romania and the bucharest university of economic studies. over the last ten years, the ermas conference has become the flagship of the economics academic conferences in romania with the constant support of the babebolyai university and, starting 2019, of the ermas association. universities from iai, sibiu, timioara and for the current edition, the bucharest university of economic studies have also been supporting this initiative ; and of course, your constant and impressive support as contributors to each edition of the conference with high quality research papers. i do believe that our partnership with the academia is based on a longstanding tradition, as a pillar for progress and public policy development in romania. back in 2014, i encouraged you to dedicate some of your research to specific problems of the romanian economy and society, to participate in public debates on relevant economic topics, to collaborate with the local academic environment, as well as with the institutions in charge of implementing economic policies. many of you did so. the activity of the ermas association, the common projects some of you have developed in close collaboration with my colleagues from the national bank of romania, as well as your partnership with domestic universities are excellent examples and i encourage you to continue. ladies and

stress this fundamental aspect. if we fail to adhere to it, we will then have all the ingredients for further crises. a number of the criticisms directed at re - regulation concern its contradictions, real or assumed. for example, some feel that the tightening of capital and liquidity ratios is too severe and risks adversely affecting the financing of economies. does this criticism strike you as justified? jean - claude trichet : in our view, the rules which have been defined for capital requirements are optimal. we reflected long and hard on them. of course, there are arguments in both directions, but considering the drama resulting from a crisis in terms of lost growth and job creation, we gain a lot more by being reasonably demanding in terms of capital. preventing further crises from occurring is a benefit that far outstrips the potential losses, if certain analyses are anything to go by. let ’ s be clear one more time : these decisions, debated at length by those primarily responsible, have been evaluated at governor and ministerial level and adopted at the global level by heads of state and government. they must be implemented. another criticism : this tightening of the rules runs the risk of producing a concentration in the financial sector, and on the financial markets as well, which is even stronger than it is today. jean - claude trichet : i do not believe so. we must be constantly and closely vigilant with regard to the structural changes to international finance. there are permanent risks that we must continue assessing, but i do not think the rules we have just defined, or those still being worked out, will lead to this hyper - concentration. on the contrary, i have to say that one of the main lessons of the present crisis is that there were very high risks associated with what i would call the “ financial mammoths ”. is too little attention being paid to the much - discussed area of “ shadow finance ”? – the issue of the “ non - banks ”, of shadow finance, and of all the institutions or market participants not under the oversight of the banking supervisors, is very important. over the last two decades we have witnessed a tremendous explosion in new financial institutions. i myself lived through a period during which all the institutions with high leverage, by the end of the 1980s, were managing capital worth something in the region of usd 100 billion. 17 years later, in 2007, the figure was usd 3, 000 billion! very significant financial services have been, and are being, rendered by these market