economists can provide. and they also extend far beyond the policies that central banks have at their disposal. let me therefore focus on the two main topics that germany has made its priority under its g20 presidency, which began this month. these topics address two key challenges for global and, in particular, european policymakers : resilience and digitization. the g20 or “ group of twenty ” is an international forum for governments and central bank governors from 20 major economies. it was founded in 1999 with the aim of studying, reviewing, and promoting high - level discussion of policy issues pertaining to the promotion of international financial stability. the g20 presidency rotates among the g20 member countries – germany ’ s presidency follows that of china and will be followed by argentina. while each presidency has its own key projects, continuity is key in the g20 process. with its focus on resilience, the german g20 presidency builds on previous work on structural reforms and growth - promoting policies. 1 / 5 bis central bankers'speeches 2. strong real economies are the basis of resilience more resilient economies are less prone to severe downturns, rebound faster from negative shocks, and adapt more easily to structural changes. the ability of the private and public sector to absorb shocks is therefore an important factor affecting resilience. high levels of debt constrain this ability, in particular if low productivity growth weakens the ability to service outstanding levels of debt. a stable financial system and a resilient real economy are two sides of the same coin. yet productivity growth has declined over time in many countries. in the euro area, for instance, labor productivity is currently growing at a rate of 0. 4 %. 2 it lags behind the growth rates of the us and other advanced economies. the gap in productivity growth between europe and the us has been widening since the mid - 1990s. empirically, it is difficult to attribute differences in productivity growth across countries and regions to specific factors. factors such as institutions, demographic trends, or the macroeconomic environment interact and are difficult to isolate. regional differences in productivity within countries can also be very persistent. and here i am not referring to regional differences within italy. instead, what i have in mind are differences between eastern and western germany. the former east german states have developed very differently than the west german states since german reunification. after the wall came down and markets were opened up, there was a rapid convergence process. over the first ten years

7 percent on average. however, the range for german banks varies and can be as low as 2 but also as high as 25 percent for an individual bank. ( slide ) in conclusion, let me highlight the key aspects i would like to see considered in the context of commercial real estate financing. you have seen, that cre tends to be more volatile. bis central bankers ’ speeches moreover, global and adverse economic developments usually have stronger impacts on cre markets and financing compared to its relative, the residential real estate market. cre financing is clearly a global business that accounts for a considerable part of banks ’ assets. as highlighted before, the cre market attracts multiple lenders with different backgrounds. and they have a multitude of finance tools in their hands. it is not surprising that cre finance is rather complex and differs even more among countries compared to the residential equivalent. all this contributes to limited availability, quality and comparability of data on cre financing and markets. ( slide ) this workshop aims at the importance of cre underwriting and its role in financial stability. there are numerous aspects and implications to discuss over the next few hours. and hopefully, there are first conclusions being drawn and questions being answered. for example : in what way may cre cycles and potential asset price bubbles affect cre underwriting and financial stability? to what extent would the deterioration of cre - related asset quality and values affect banks ’ balance sheets? does banks ’ forbearance play an important role? what would be the effect of further loan losses and break away of profits, which relate to cre lending? what are the dynamics and dependencies between investors, different types of lenders, market developments, and economic prospects? and last but not least : from a regulator ’ s perspective – and as a possible issue for discussion during the afternoon sessions –, do we have all relevant information and tools at our discretion to identify cre related risks and to manage or even limit those to an acceptable level? a stable financial system is essential. cre underwriting plays an important role in this. appropriate information and instruments now need to be identified and if seen as necessary should be implemented subsequently. this workshop and all your contributions will help to take the right steps towards safer banks and a better financial system. as a central banker, i am therefore particularly happy that my fellow lead discussants in this session all are from the private sector. and i look forward to your contributions. thank you very much for