its arrears to the private sector in the next year. nonetheless, it is important that the banking industry continues to support sound business propositions of borrowers. banking activity may be driven by profits but is based on relationship with its customers. now is the time when such relationship is being tested, and good bank management must look beyond the current challenges to keep and strengthen such relationship. our focus as the supervisor of the banking sector will remain in having institutions that are well capitalized and liquid, and that continuously improve their standards of risk management. in our forthcoming communication with banks, we shall pay special attention to how they assess and monitor credit, market and liquidity risks ; and how they include the results of this process in the management decisions. finally, i want to stress again the importance of economic reforms that would ensure stronger economic growth in the medium term, and will provide for more effective banking activity. the objective of such reforms must be to improve the productivity and competitiveness of our economy through : reducing uncertainties over the direction of future developments by identifying the right policies and reforms ; creating a favorable fiscal, legal, business and political climate that will promote investments in the economy ; improving the workforce education and specialization ; generating the benefits of economies of scale through integration of businesses in the regional or european market ; and increasing the efficiency of the public and private sector through the improvement of governance. in the financial system, the reforms must focus on deepening and broadening the financial market, with the objective of improving access to finance, improve efficiency and reduce risks. i hope that this forum will bring up new ideas on how to overcome current challenges that the real economy and the financial sector is facing. in any case those ideas can be implementable only if they do not focus on a single sector, but also recognize the close relationship and inter - linkages among various sectors in the economy. thank you very much! bis central bankers ’ speeches

conflicts in their use could probably be avoided. see esrb ( 2012 ), annual report 2011, may 2012. proposal for a directive of the european parliament and of the council on the access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms and amending directive 2002 / 87 / ec of the european parliament and of the council on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate, com ( 2011 ) 453 final, brussels, 20 july 2011, and proposal for a regulation of the european parliament and of the council on prudential requirements for credit institutions and investment firms, com ( 2011 ) 452 final, brussels, 20 july 2011. recommendation of the european systemic risk board of 22 december 2011 on the macro - prudential mandate of national authorities ( esrb / 2011 / 3 ). proposal for a council regulation conferring specific tasks on the european central bank concerning policies relating to the prudential supervision of credit institutions, com ( 2012 ) 511 final, brussels, 12 september 2012. bis central bankers ’ speeches 4. concluding remarks let me to conclude by quoting oscar wilde : “ you know more than you think you know, just as you know less than you want to know ”. escb governors are very pleased with the mars report and how much progress the network has made. the interaction with “ the rest of the world ” today and tomorrow should fertilise the work further. i wish you many fruitful discussions in this regard. thank you for your attention. bis central bankers ’ speeches