is that the bank - sovereign nexus, which the banking union was designed to counter, persists, within a complex and incomplete framework. european leaders must therefore not lose sight of the end goal and instead complete the project in a reasonable timeframe. the need to press ahead is made even more urgent by the fact that while the european banking and financial system has demonstrated its resilience, its stability is still at risk. indeed, risks to europe ’ s macro - financial stability have recently intensified. while it is true that the expansionary monetary policy stance in the euro area and in europe at large is supporting the liquidity of financial markets, curbing tensions on government securities, and m., 2014, ‘ european banking : bailout, bail - in and state aid control ’, international journal of industrial organization, vol. 34, issue c, pages 37 - 43. 3 schoenmaker d., 2015, ‘ firmer foundations for a stronger european banking union ’, bruegel working paper, 2015 / 13, november. 4 rossi s., 2016, ‘ the banking union in the european integration process ’, speech at the conference on european banking union and bank / firm relationship, april. 2 dewatripont easing bank funding conditions, uncertainties have nevertheless increased following the uk referendum and, though perhaps less so, the italian referendum. nor, given recent political events, expected policy changes in the united states, and fragilities in emerging economies, are they likely to be dispelled over the medium term. european banks ’ profitability and their business model are under extraordinary pressure, due to sluggish growth, low interest rates and, to a differing extent across countries and banks, excess capacity, large stocks of non - performing loans and difficult - to - value ( level 3 ) assets. meanwhile, low nominal interest rates are squeezing the profit margins of european insurance companies and pension funds. at a recent hearing of the committee on economic and monetary affairs of the european parliament, the ecb president warned that a lengthy period of low interest rates has created ‘ fertile terrain ’ for financial - market risks and called on governments to take action against the risks associated with rising debt levels or excessive valuations, which have resulted in significant vulnerabilities in some european real estate markets. while they are more solid today than they were in the pre - crisis period, in the absence of an adequate, proportionate and properly functioning safety net, europe ’ s banks are also more

holiday or health - care packages. a bank customer may benefit from open api by using thirdparty applications to consolidate for analysis purposes his cash flow and investments kept in several bank accounts. however, the key benefits of open api can be reaped only if it is widely adopted in the banking sector. and this is precisely the reason why some jurisdictions are taking steps to encourage or, in the case of the eu including the uk, even mandate through legislation financial institutions to subscribe to open api. we aim to finalise our policy on open api for the banking sector around the end of the year. we believe that the wide adoption of an open api framework would promote collaboration between banks and tech firms, a crucial element for stimulating innovations and improved services for customers in hong kong. ( f ) cross - border collaboration in fintech as an international banking and funding centre, hong kong must promote the use of fintech in managing cross border financial flows. the hkma is in close dialogue with several authorities in other jurisdictions to collaborate in this area. as the first step of strengthening our cooperation within the guangdong - hong kong - macao bay area, we are partnering with shenzhen to promote fintech and talent developments. we are also discussing with other centres in the bay area to strengthen collaboration in fintech. more details will be announced later. separately, the hkma is working with the banking industry to develop a distributed ledger technology ( dlt ) platform for digital trade finance. we also hope to be able to announce soon the details of our collaboration with singapore in linking up our respective trade platforms. this dlt initiative, if implemented, should bring significant benefits to financiers, importers and exporters by enhancing the transparency of cross - border trade finance processes, improving operational efficiency and reducing the risk of frauds. ( g ) enhancing research and talent development the hkma, together with our anchor partners, hong kong applied science and technology research institute, science park and cyberport, will step up our already close collaboration in research and talent development. of course, we will also make good use of our cooperation frameworks with authorities and partners in other jurisdictions to achieve a win - win outcome in this area. ladies and gentlemen, the upgrading of our banking system to a new and higher level of smart banking is not just something nice to have. it is a must! to meet the rising aspirations and demands of customers, banking and technology must converge sooner rather than later. unlike the social media world,