is full of many successful examples, probably the most so far in the world history, of application of wide range of prudential measures, modifications in the standard set of instruments and implementation of nonstandard measures of monetary policy. the need of comprehensive risks monitoring in the economy and greater flexibility concerning the intensity and the type of measures, taking into account the ultimate monetary objectives, is probably one of the major lessons from the crisis. the economic theory clearly refers to the fact that the financial system is a relevant factor for economic growth, and the new message, clearly sent by the recent crisis, as the president of the bundesbank, weidmann, once said in one of his recent addresses, 1 is that there is a need of “ well designed regulatory reform ”. otherwise, a financial system which is developed and widely globalized today could become an obstacle for the economic growth. thus, even though the crisis is still present in our everyday life, the financial institutions have already been facing new banking standards, and the national regulators seek to incorporate them in the national regulation. the debt crisis in the euro area resulted in establishment of new fiscal framework of the european union and emphasized the need of fiscal consolidation. fiscal imbalances are not sustainable on a long run, which is a postulate that also applies to the countries of the region, particularly countries where fiscal consolidation is crucial for maintaining macroeconomic equilibrium. besides the experiences above, during the crisis we also gained many other experiences related to the market sensitivity, the promptness of market response to the changes arising from the development of crisis, and the slow reversible process of regain of confidence among market participants. lessons and experiences learnt from the crisis should help us face future challenges more successfully. jens weidmann, president of the deutsche bundesbank, keynote speech at the frankfurt finance summit, frankfurt, march 2012. bis central bankers ’ speeches conclusion please allow me to ascertain that this crisis broadened our perspectives, imposed new aspects of policy making, and increased our interdependence in the global economy. the south - eastern european countries which have been facing many challenges on their pathway to the european union will probably face new future challenges arising from the current conceptual shifts in the union. however, the countries from south - eastern europe should continue seeking to create sound macroeconomic policies, inevitably accompanied by structural reforms that need to ensure higher structural quality and structural flexibility of economies, which is a sine qua non not only for prompter

thus, my first hypothesis was that, in the years to come, we will likewise see a moderate shrinkage of bank balance sheets and transaction volumes in the euro area – albeit, of course, with a certain variation from one country to the next. the number of employees and branches per capita, too, will continue to decline. these trends will be driven further by the digitalisation of financial services. and the number of institutions itself will keep falling. one of the reasons, to which i will come in a second, is mergers. the other is that there will be market exits which, i hope, will be carried off without any political intervention and in an orderly fashion under the resolution regime. there is little doubt that this downsizing process is “ shrinking to health ” – difficult as the repercussions will be for institutions and their employees. out of cost - efficiency considerations, if nothing else, overcapacity which is no longer needed has to be either downsized or deployed to other profitable purposes. and, from a macroeconomic perspective, it is particularly necessary to want a financial sector that is not inflated but efficient. 3. the role of mergers & acquisitions what is more doubtful, however, is the weight that each of these three different consolidation approaches will have. what share will the shrinking of existing institutions have? how many of them will exit the market? how many of them will merge with other institutions? my personal take on this – which dovetails with the second hypothesis i mentioned at the beginning of my speech – is that an increase in m & a activity, and thus a higher level of market concentration, can make sense from both an economic and a commercial perspective ; that said, long - term success will be reserved for initiatives which ultimately bring forth a stable credit institution running a sustainable business model. why am i making this point so emphatically? because m & a has a mixed track record in the banking sector, if you measure it in terms of profitability, stability, market power and customer satisfaction. some see bank mergers as a kind of magic formula for driving consolidation forward. they ’ re so optimistic because of the economies of scale which typically arise when identical activities are combined and the synergy effects which can be harnessed when complementary operations are fused. and it does indeed appear that mergers unleash positive effects in reality, not just in theory – a meta study conducted last year by the ecb concluded that m & a tends to generate positive economies of scale,