especially then – institutions must therefore stick to the reform path they have embarked upon. their willingness to do so is not just in the interests of the individual institutions. for it is only when banks and savings banks in germany fare well as a whole that they can fulfil their central economic function – and when they do that they ultimately serve us all. thank you for your attention. 1 deutsche bundesbank, monthly report, february 2017. 2 dombret, gunduz, rocholl ( 2017 ) : " will german capital? ", deutsche bundesbank discussion paper no 01 / 2017. banks earn their cost of 3 deutsche bundesbank, monthly report, september 2015. 4 the results of the last survey, at : www. bundesbank. de / 348250. carried out in september 2015, are available online 5 " the revolution is over. long live the revolution! ", speech by sam woods at the city banquet, mansion house, london, 26 october 2016. 5 / 6 bis central bankers'speeches 6 federal reserve bank of minneapolis, economic policy paper 13 - 3 : " quantifying the costs of additional regulation on community banks. " quoted in the economist ( 11 february 2017 ) : " the litter of the law. " 7 deutsche bundesbank, bank office statistics 2007, 2015. 6 / 6 bis central bankers'speeches

andreas dombret : the challenges currently facing the german banking sector speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the annual reception of the regional office in bremen, lower saxony and saxony - anhalt, hanover, 6 march 2017. * * * 1. introduction ladies and gentlemen mr von stenglin as well as the chance to eat, drink and be merry, a reception such as this is always a good opportunity to take stock of events and to look ahead at what the future might hold. today, i would like to do just that, with a specific focus on the german banking sector. nine years on from the outbreak of the financial crisis, the overall economic situation in germany is relatively positive. activity is robust, and the german economy recorded growth of almost 2 % last year – its best performance since 2012. 1 germany ’ s unemployment rate has also fallen every year since 2010. many sectors in germany are feeling the benefit of the economic recovery, not least the banking industry. lending to the real economy has been back on the rise since 2013. and in any case, german banks and savings banks weathered the crisis comparatively well, owing, among other things, to the highly diverse nature of the german banking sector. what is more, the post - crisis period has seen credit institutions strengthen their capital base and scale back the risks on their balance sheets. things are looking pretty rosy, you might think. but a glance at the current sentiment within the industry reveals that things most certainly are not rosy. banks and savings banks are facing momentous challenges. the reasons for this vary from one institution to the next. but there are some challenges that affect them all in equal measure. as i see it, three key factors are at play here. first, the persistent low - interest - rate environment, which is bringing to light the weak profitability afflicting many german institutions. second, the global regulatory efforts embraced after the crisis, which still haven ’ t been wrapped up and will force us to make substantial adjustments here in germany, too. and last but not least, the advance of digitalisation, which, perhaps more than any other factor, represents both a challenge and an opportunity. these three challenges deserve particularly close attention because if institutions are to overcome them, they will have to start taking decisive action today. but to do so, they first need to get a sound grasp of the situation. so let ’ s take a closer look at what exactly