fout! onbekende naam voor documenteigenschap. opening remarks by frank elderson at the ngfs conference paris, 17 april 2019 at the c onference of the network for greening the financial system, the network presented its first ngfs comprehensive report. in it, the network issued six recommendations. the first four apply to the work of central banks and supervisors, while the last two are for policymakers. in his opening speech at the conference, frank elderson outlined why central bankers and supervisors have joined the network. elderson describes why they engage in greening the financial system, what the network aims at and what steps are already taken during the year and a half that the network exists. fout! onbekende naam voor documenteigenschap. in 1163 the first stone was laid of what later became the very heart of paris. two hundred years of countless hands, building, carving, constructing together. a marvelous monument. a tribute to what humanity can achieve. when working together, with a commonly held belief in a shared objective. the day before yesterday the notre dame - so much notre dame burned. and all our hearts burned with her. what was lost was a beautiful cathedral. what was lost was a jewel in the crown of the world ’ s heritage. what was lost was a symbol of peace and worship. but what was not lost, is our sense of common destiny. what was not lost is our acute awareness of what we, humanity can achieve, when working together, with a common held belief in a shared objective. in december 2017 the first stone was laid of what later became the ngfs. one and a half years, countless hands, building, carving, constructing together. a marvelous coalition of the willing. a tribute to what central banks and supervisors can achieve, when working together, with a commonly held belief in a shared objective. it ’ s a therefore only appropriate that we are here in paris. paris, where the seed for this initiative was first planted back in 2015, at the paris c limate agreement. paris, where the seed sprouted a couple of years later, at the one planet summit. i am happy to say that the network for greening the financial system has now firmly taken root. it is growing at an impressive rate, with shoots popping up all over the pla net. only yesterday two new members and an observer joined us. a warm welcome to the swiss national bank,

were at the heart of the sovereign debt crisis. it would be unfair to only look at germany for this situation, as many serious policy mistakes were made in southern countries. first, several countries failed to implement the structural reforms that were needed to function smoothly in a monetary union. rigidities in product and labor markets contributed to severe losses of price competitiveness. second, several countries experienced booms in domestic demand on the back of unsustainable growth of credit and house prices. third, several countries failed to use the windfall of lower interest rates due to emu - membership for a lasting improvement of public finances. between the mid - nineties and the financial crisis, interest rate expenditure on public debt in the periphery decreased by 4. 5 % of gdp on average. only spain used this fully to reduce budget deficits. unfortunately, in the other countries, on average almost half of this percentage did not translate into lower deficits. these policy mistakes suggest that the burden of adjustment mainly lies in southern europe. but it would also be unfair to turn the crisis into a moral caricature between the virtuous and the profligate, between ants and grasshoppers. as jens mentioned in one of his recent speeches, several so - called core countries are not in great shape either. think of low bis central bankers ’ speeches competitiveness and high public debt in france. think of low productivity growth in the german service sector. and think of the painful correction of house prices here in the netherlands. this clearly illustrates that all emu member states need to carry out reforms to improve their economic growth potential. moreover, policymakers in all european countries made misjudgments regarding the functioning of emu. most didn ’ t see these flaws when we celebrated 10 years of emu, only months before the collapse of lehman brothers. at the time, we all failed to see how the growing importance of financial factors had fundamentally changed the monetary union. it wasn ’ t recognized that the euro area was experiencing asymmetric financial cycles rather than asymmetric business cycles. this is serious omission as recent research shows that these financial cycles are much larger and longer - lasting than normal business cycles. they created divergences that emu was not designed to deal with. in addition, we thought that the strong increase of financial integration after the introduction of the euro would enhance risksharing. but we didn ’ t realize that it also spurred contagion and pro - cyclical capital