by market financing. the digital and green transition that lie ahead will require huge investment but also, and most importantly, innovation. on this front, the european union ( eu ) lags asia and the united states. take the example of research and development ( r & d ) spending : in 2018, total public and private r & d expenditures in the eu were equivalent to 2. 2 % of gdp, compared with 4. 5 % for south korea and 2. 8 % in the united states. however, the european union holds a trump card as it boasts the world ’ s largest pool of savings, with the annual surplus of domestic savings over investment regularly exceeding eur 300 billion. for this reason, we see a critical need to foster equity financing, as it is ideally suited to innovative projects, which entail higher risk - taking. this is also why, on a broader note, we support implementation of the capital markets union [ slide 5 ], which, through a series of technical reforms, will enable europe ’ s plentiful savings reserves to be allocated efficiently to companies through market financing. efforts to strengthen the capital markets union must be conducted in concert with steps to deepen the banking union, which remains an absolute priority. these two initiatives are crucial to the continued financial integration of the eu and will ultimately pave the way for investment and innovation to be funded more effectively. that is the diagnosis that i wanted to share : the twin transition to a digital future and a sustainable economy has the potential to weaken not only banks, but also financial stability and the real economy. yet this is merely a diagnosis, not a prognosis. this same risk could also be a source of beneficial changes. 2. the banking sector : a participant in the digital and green transition 3 / 6 bis central bankers'speeches and so i come to what could and should be done to turn these challenges into opportunities. i will talk about three courses of action. first, the regulatory response that will enable the operating framework for finance and payments to adapt to the new challenges. second, the adjustments that banks must make. third, initiatives by the banque de france to lead by example and support participants as they engage in the necessary transformations. 2. 1 the regulatory responses to these challenges seek to ensure that risks are better controlled and to create a change - friendly framework [ slide 6 ] for starters, let ’ s talk about the regulatory responses being initiated by lawmakers alongside regulatory and supervisory authorities. in terms of the

the banking sector to encounter any latent risks and the assessment of banks'risk management systems so that the supervisory authorities could ensure that they are appropriate, in line with the risks that banks might encounter, and up to the best banking practices in the area of effective banking supervision. basel ii principles require all banks to address all risks, such as credit risks, market risks, operational risks and others. the principles envisage that banks should have in place systems that would help identify, measure, monitor and make provisions for such risks. the domestic banks are aware of the importance that the application of the new standard should coincide with concentration on risk management in keeping with the best global practices by using the best technological solutions. reviewing the topics of this symposium and the quality of its speakers, i see that it broadly covers aspects and all types of applications of banking risk management as basel ii principles seek to highlight and address. in conclusion, i express my deep thanks to the audience and the organizers of this symposium, and we look forward to having positive contributions and outstanding papers, wishing you all success. al salumu alaikum warahmatu allahi wabarakatuh. is review 125 / 2006