welcome speech to the members of the supervisory board ( sb ) of the single supervisory mechanism ( ssm ) and their spouses, on the occasion of the sb meeting in the bank of greece 12 may 2022, by yannis stournaras it ’ s a great pleasure to welcome you here tonight on the shores of piraeus, just a few miles from the straits of salamis, where some 2, 500 years ago, in 480 bc, a greek fleet defeated the much larger naval force of the persians, in what is considered to be one of the most decisive naval battles in history. nevertheless, its usual portrayal, as a clash between east and west, overshadows some of the finer details, notably the bitter conflict and dissent between the allied greek city - states, right up to the eve of the battle. it was only in the face of an existential threat, in the form of king xerxes ’ s formidable fleet, that divergent interests gave way before a common objective, but only briefly. briefly, because not long after the spectacular greek victory in salamis, democratic athens and oligarchic sparta locked horns in the deadly peloponnesian war, which lasted from 431 bc to 404 bc, devastated athens and marked the dramatic end to the 5th century bc and the golden age of ancient greece. the pattern should be familiar. all of us are proud of the speed and coordination with which the eurozone responded to the recent pandemic, not least because it was perceived as a symmetric, external shock. few of us would be proud of the way the fallout from the great financial crisis was addressed in the eurozone, not least since its impact was asymmetric and conditioned by internal factors. and most of us would admit that – once the urgency of each crisis subsides – momentum is lost and much needed reforms get bogged down by divergent national priorities. despite formidable progress, key aspects of our banking union remain in limbo ; without them, there is little prospect of making headway towards greater integration in the eurozone. none of this is new. the generals meeting on salamis to debate strategy on the eve of the battle would probably feel quite at home in some of the meetings in brussels or frankfurt – although they would probably complain about the weather! after all, european integration began in common defence against a perceived existential threat, during the cold war. ever since, it has been propelled forward in response to

reflecting the downgrading of securitized products and persistent concern about possible further losses at financial institutions. the functioning of markets for securitized products has remained impaired as evidenced, for example, by continued decreases in the amount outstanding of asset - backed commercial paper ( abcp ) issued and sluggish trading of collateralized debt obligations ( cdos ). corporate bonds have been issued at a reasonable pace, but the corporate bond market is still undergoing adjustment as seen in increased issuance spreads. stock markets are still unstable, and stock prices declined substantially around the turn of the year. the volatility in global financial markets seems to reflect a market correction following the laxity in risk evaluation that had developed during the long period of benign economic and financial conditions. this adjustment is therefore expected to require some time to work itself out, and during the process financial institutions will have to bear a certain amount of losses. since summer 2007, organizations such as the international monetary fund ( imf ) and the organisation for economic co - operation and development ( oecd ) have released their estimates of the size of losses incurred from financial products related to subprime mortgage loans, but it is difficult to accurately grasp the amount of final losses, since the correction in the housing market is ongoing. financial institutions in the united states and europe have been posting considerable losses, and many have announced measures to boost their capital to compensate for these losses. how successful these measures are in helping financial institutions and the financial system to restore their credibility will need to be monitored closely. short - term funding markets in the united states and europe were under elevated pressures in late 2007 as financial institutions tried to secure end - of - year funds. to address this situation, on december 12 central banks in the major economies announced joint measures to ensure the stability of global financial markets. the federal reserve established a temporary term auction facility. under this facility program, the federal reserve can auction term funds against a wide variety of collateral, thereby providing funds with longer maturities to more financial institutions. moreover, it established foreign exchange swap lines with the european central bank and the swiss national bank, and based on this, u. s. dollar auctions were carried out in europe. the bank of england and the bank of canada actively conducted operations to provide ample term funds with maturities beyond year - end. the bank of japan and the swedish riksbank welcomed the action and issued a press release stating that they would also appropriately provide liquidity to money markets in