april - may, thanks to its diversification. [ … ] stay safe and let ’ s also stay in touch. ” getting back to the theme of the conference, how do we reimagine banking in africa in a post - covid world? i will venture in three broad directions, setting the ground for what i am sure will be an insightful discussion over the next two days. first, people centricity will be the orchestrating theme for banks. people ’ s needs will be at the heart of all that banks do. the pandemic has had devastating impact on lives and livelihoods globally. by world bank estimates, over 130 million people could be pushed into extreme poverty by 2030. in particular, msmes have been pushed to the edge by the pandemic and will require significant support if they are to survive. msmes, as you are aware, are the engines of growth across africa. in 2018, before the pandemic, the international finance corporation had estimated a funding gap of usd331 billion for smes in sub - saharan africa. i expect that with the pandemic, this gap has increased substantially, with banks expected to fund a significant portion. beyond funding, banks will be expected to play a key role in providing business advisory services to msmes as they pivot their business models to the new normal. second, agility will define the playing field for banks. traditional business banking models will need to be refreshed to be fit for purpose in the world of anytime anywhere banking services. customer expectations were changing even before the pandemic for anytime anywhere banking services. the pandemic has only served to accelerate the trend towards on - demand services. this will require agile business models, that banks on their own, may not be able to deliver particularly through legacy information, communication and technology ( ict ) systems. partnerships with new, nimble players will be imperative. in this regard, banks will be akin to conductors in an orchestra bringing together many different players particularly fintechs to deliver what customers require. this will in turn require banks to scale up through additional capital injections, mergers and acquisitions. the third and final theme is on regulation that will require recalibration to fit in the new normal. the fast evolving digital ecosystem is spawning a new set of players and activities that mimic financial services. globally, there has been the proliferation of digital currencies that have been presented as payment instruments including cyptocur

##ers encouraged banks to step up their lending to governments. that ultimately paved the way for the disastrous sovereign - bank nexus. as the crisis unfolded, many banks, notably in the euro - area periphery, raised their exposures to domestic government bonds. by doing so, they tied their fate even more closely to that of their national governments and made it almost impossible to restructure public debt. making the “ no - bail out ” clause more credible is therefore key when it comes to strengthening a decentralised emu design. what we need, then, is a procedure for restructuring debt in an orderly manner. this is where the bundesbank has proposed an automatic maturity extension for all bonds, which would be activated whenever a government applies for fiscal support from the european stability mechanism ( esm ). automatically extending maturities would allow the sovereign in question to tackle its fiscal challenges bis central bankers ’ speeches while preventing investors from bolting. if it turns out that the ailing country really is insolvent, legacy creditors could then be held liable. clearly, achieving a stable monetary union with a decentralised design is not an easy task, but it can be done if politicians are willing to implement the institutional reforms needed to strengthen individual responsibility. another project which will reduce fragmentation is the capital markets union, which is currently in the making. creating a single market for capital across all 28 eu member states by removing barriers to cross - border investment will make a key contribution to improving the absorption of macroeconomic shocks and lessening the impact of heterogeneous economic developments. the creation of a capital markets union could stimulate growth in the european union substantially. not just that : it could also boost the stability of european monetary union. integrated capital markets foster private risk sharing, which is a far more important shock absorber than public risk sharing. since equity has a much greater capacity to absorb shocks than debt, fostering equity markets should be the particular aim of the capital markets union. 5. conclusion let me conclude. during my speech i pointed out several pivotal decisions that lie ahead for europe. in the next week, we face the challenge that the next step in the eu ’ s history may well be not one of union, but one of separation. although it is neither the time nor the place to enter into this political debate, i really hope that the majority of the uk electorate will share our view that most of the current challenges europe is faced with need a european and not a national answer. i am