across the established limits of the banking industry – along new, digitalised value chains. and this does not necessarily lead us to a concentration of today ’ s banking business in the hands of a small group of large banks. 2. why are we talking about consolidation? let me begin with a question : why is there so much talk of consolidation in the banking sector? and why am i also talking today, in my farewell speech, about a topic as “ old hat ” as consolidation? there are four reasons for this. 1 / 9 bis central bankers'speeches first, because the financial sector, especially the banking sector and large banks in particular, dominated large segments of the economy in the 20 years prior to the financial crisis. a case in point is shown by the highly educated engineers, physicists and economists who developed complex financial products and risk management models – instead of building bridges or developing medical devices. these, but also many other bright university graduates, were sucked in by the financial sector because they could measure themselves against the best and could earn a lot of money – however, only thanks to a financial bubble. although this bubble burst in 2008, overcapacity in the financial sector did not automatically go away, but has had to, and still has to, be gradually shrunk in a process that has been going on for years – much as it also took years to build up. second, in the past few years, we have been repeatedly found ourselves debating the topic of “ overbanking ” – the european economy ’ s overdependence on the banking sector, 1 the bloatedness of the banking sector, its political influence, the size of its payrolls, the number of institutions. that, too, is a reason why i am talking about consolidation this evening. the extent quickly becomes clear if we look at the size of the banking sector relative to gdp : in germany, for instance, it rose from less than 190 % in 1993 to 360 % in 2008, the year the financial crisis broke out. but there ’ s another, third reason : the banking sector is currently in the throes of fundamental transition. because more and more financial services are being offered outside the traditional banking sector, fintechs and “ shadow banks ” are putting pressure on the banking sector to consolidate. and, finally, there is a fourth driver of the debate on consolidation : the poor profitability of european and, not least, also german institutions. the earnings of german credit

absence of european unification. the impact of the single market on the prosperity of european states, however, has been considerable. it is estimated that european economic integration has boosted annual economic output by between 5 and 25 per cent. 1 2 3 that ’ s a handsome 1, 450 to 7, 250 euro per capita. there is no question that economic and monetary union was the boldest step towards deeper economic integration. and at the same time, it was a twin promise : of price stability, and of stronger long - term economic growth. there is a broad consensus that emu has so far succeeded in delivering on the first of those promises. i dare say that significantly fewer people would claim that it has done likewise on the second. for one thing, mounting economic competition across borders has been driving change, just like technological progress has, and many people are afraid of this. if the benefits not just of economic integration but of innovation as well are to be felt by the greatest number of people, the framework conditions also need to be right. flexible economic structures and a good education system, say, are prerequisites for sustainable growth and for ensuring that many people can share in the opportunities offered by technological progress and international trade, for example. for another thing, though, the financial and sovereign debt crisis shook the euro area to its core. taxpayers were forced to step in for billions upon billions of euro in bank losses. joblessness in some member states rocketed to levels hitherto unseen in the post - war era. to all intents and purposes, european and global institutions became the ancillary government in individual countries. and many saw the rescue packages as the first step on the road towards a transfer union – something which had been categorically ruled out prior to the launch of monetary union. many perceived the problems instigated by the crisis to be huge. some even thought them irresolvable. indeed, a number of commentators, particularly on the other side of the atlantic, but elsewhere, too, predicted that the euro would come crashing down. that didn ’ t happen – and it would have been a disaster if it had. at the same time, let ’ s be honest 2 / 9 bis central bankers'speeches – the future might also hold regional or sectoral crises in store which put the euro area to the test. the upbeat economic situation right now shouldn ’ t blind us to the fact that it is one outcome of a very accommodative monetary policy