it was six cents for every one hundred dollars of deposits. this time - frame covers five of the most severe episodes of financial panic in recorded history, most notably the 1907 crisis. 6 do you know why the losses were so small? because banks were well capitalised and bank equity cushioned depositors – and the economy more broadly – against losses in the event of a bank failure. according to a study, the average capital - asset ratio fell from a high of 60 % in 1880 to a low of 20 % at the turn of the century. then, after the crash of 1929, it rose to about 30 % in the 1930s and 1940s. 7 it is now much lower, as you know. making sure that banks are well - capitalised is the foremost life jacket of our system. lifesupport in the form of liquidity assistance cannot act as a surrogate for appropriate management practices inside the banking system. the european systemic risk board ( esrb ), which will be hosted by the ecb, will assume a novel role in crisis prevention at the level of the 27 economies of the european union as a whole. the esrb will have the aim of identifying emerging systemic risk, and, if necessary, publishing early warnings as well as making recommendations to the competent authorities. the ecb is also fully involved in g20 reform efforts. international cooperation is absolutely vital given the interconnectivity between financial markets. a return to pre - crisis business practices would be fatal. financial market participants need to restore trust. but this alone will not be sufficient. we absolutely require intelligent regulation that will prevent self - destruction. it seems to me that we are all – industrial countries as well as emerging economies – very much united in purpose : correct distorted incentives, improve very significantly the resilience of the financial system, and counteract pro - cyclical mechanisms and behaviours. we are also convinced on both sides of the atlantic – and here in stanford, i would say also on both sides of the pacific ocean – that the success of the enlarged governance of global finance and the global economy through the g20, the financial stability board and the cooperative activities of the central banks, is key for the stability and the prosperity of the present unified global economy. concluding remarks at the height of the crisis – when irrational exuberance had turned into excessive pessimism – i repeatedly stated that regaining confidence was of the essence. since then, confidence in the short term has been restored, not least

andreas dombret : digitalisation – repercussions for banks and their supervisors speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the 16th norddeutscher bankentag “ digitalisation – ( r ) evolution in the banking industry ” at leuphana university luneburg, lundeburg, 8 june 2016. * * * professor baxmann ladies and gentlemen people love simple stories. there is evidence to show that we find it easier to follow a speech and memorise its contents if we quickly pick up the thread and the message that is being conveyed. the picture isn ’ t much different where the digitalisation of the financial sector is concerned. digitalisation is often portrayed as a huge opportunity, as a grave threat, as the first step into a world without banks or as a decades - long gradual process of evolution. but if you ask me, we need to suppress the urge to only ever want to tell, or have ears for, just one of these narratives. we will only be able to grasp what digitalisation means for the banking sector if we are willing to view it with very different sets of eyes and acknowledge the existence of highly disparate aspects. bearing this in mind, my speech today here at leuphana university will seek to paint a nuanced picture that does justice to the genesis and growth of digitalisation and how it will impact on banks and their supervisors. 1. general digitalisation trends ladies and gentlemen, technical innovation isn ’ t exactly a novelty in the banking sector. as you will know, credit institutions were often among the early adopters of information technology in their administrative operations, at the customer interface or in trading. hardly a day goes by without digitalisation grabbing the headlines, and that ’ s probably because it ’ s come to be seen as a force that will shake the structure and internal functional make - up of the banking industry to its core, just as it has done in other industries. but it ’ s not just the technical capabilities of digitalisation that make it so special ; the social upheaval it is expected to trigger – and already has done – also makes it something to be reckoned with. there is already evidence aplenty of this phenomenon worldwide. even in germany, which isn ’ t a pioneer in this regard, most bank customers now usually conduct their banking affairs online, and mobile banking is also on the rise there. there are already some institutions which use