emerge, reflecting factors such as a more favourable than expected macroeconomic environment, should be exploited to make faster progress with fiscal consolidation. at the same time, in countries where there is still a need to take additional specific measures to achieve consolidation targets, such measures should be adopted swiftly to ensure that consolidation commitments are fulfilled. this is a prerequisite for maintaining confidence in the credibility of governments ’ fiscal targets. positive effects on confidence can compensate for the reduction in demand stemming from fiscal consolidation, when fiscal adjustment strategies are perceived as credible, ambitious and focused on the expenditure side. the conditions for such positive effects are particularly favourable in the current environment of macroeconomic uncertainty. in order to support the process of fiscal consolidation, to underpin the proper functioning of the euro area and to strengthen the prospects for higher sustainable growth, the pursuit of far - reaching structural reforms is essential. major reforms are particularly needed in those countries that have experienced competitiveness losses in the past or that are suffering from high fiscal and external deficits. measures should ensure a wage bargaining process that allows wages to adjust flexibly and appropriately to the unemployment situation and losses in competitiveness. reforms to strengthen productivity growth would further support the adjustment process of these economies. we are now at your disposal for questions.

sabine lautenschlager : caution should be the life of banking introductory statement by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the single supervisory mechanism, at the association for financial markets in europe ( afme ) board meeting, frankfurt am main, 22 march 2017. * * * ladies and gentlemen, taking risks is at the heart of any healthy business, including banks. after all, it is the job of banks to take and allocate risks. but as walter bagehot said : “ adventure is the life of commerce, but caution is the life of banking ”. i agree with him. banks are far too important for the economy to indulge in adventures. they enable business by providing loans to companies or by helping them to tap the capital markets. and they also facilitate business by providing services in fields such as payments, mergers and acquisitions, and global trade. banks help the economy to grow and prosper. but they can also badly hurt it ; we saw that in the financial crisis. that ’ s why banks need to be cautious. in practical terms that requires, among other things, sound risk management. and this sets the scene for my short statement today. the topic is risk management. i will begin with some smaller, or rather bank - specific, risk management topics and end with a few big issues. sound risk management depends on good data. it also depends on firm - wide risk aggregation and reporting. those who take decisions must be in the picture. but are they? well, in the crisis we learnt that decision - makers often were not. it systems, data architecture and related processes were not up to the mark. against that backdrop, we assessed how banks aggregate data and report risks. the yardstick was a set of global best practices that were defined by the basel committee on banking supervision. these are known as the bcbs 239 principles. the result of our review : many banks do not meet the global standards. as usual, we will therefore be very explicit on how these banks should improve. and we will closely monitor the progress made by the respective banks to ensure that they meet relevant standards. ladies and gentlemen, good risk data is one thing. but processing such data is another matter. and that leads me to my next topic : internal models. many large banks use these models to calculate their risk - weighted assets, which then serve as a basis for calculating capital