environment, and in the face of adversity, caution is key, and risks must be very carefully managed. second, regardless of whether the world is topsy - turvy or not, a bank must be capable of turning a profit at any level of interest rates. that may include restructuring its own business model in order to be less dependent on interest rate business. given the challenges facing the sector, supervisors are interested in examining exactly what burdens for the institutions are truly justified in order to avoid placing any further, unnecessary obstacles in their way. and third, i would like to stress that we must not concentrate solely on the interest rate level. we face a number of quite different challenges, too. to name just one example, i expect that the london banks that are likely to move to germany and to frankfurt as a result of brexit will try to poach qualified staff from local banks. to paraphrase helmut qualtinger, an austrian actor, author and cabaret artist : a lot of things get worse by looking at them, but nothing gets better by looking away. 1 to this end, the room for manoeuvre must be recognised and utilised. i now look forward to the other speakers at today ’ s event and am interested to see what issues they will focus on. thank you very much for your attention. 1 helmut qualtinger, austrian actor, writer and cabaret artist ( 1928 - 1986 ). 5 / 5 bis central bankers'speeches

by roughly 30 %. however, you must remember that the european banking sector previously experienced immense balance sheet growth. the balance sheet reduction we have been witnessing since 2008 therefore has to be seen in the light of a significantly larger – probably excessively large – balance sheet expansion in the preceding years. back in 2014, the european systemic risk board was already sounding warnings of excess capacity. and the international monetary fund confirmed in 2016 that this problem was far from resolved. more work therefore still needs to be done to pare back the excess capacity that has accumulated over a number of years. to neglect structural change would be to jeopardise our ability to evolve and adapt. if economic realities change, banks and savings banks must likewise adapt. that is my message to german banks, without wishing to appear in any way cynical. there is an awful lot banks can do to ensure their long - term survival. many institutions have recognised this and are increasingly taking the appropriate action. i could say a lot just on the subject of digitalisation and the changes happening in the banking sector. it would simply be naive to neglect these changes. other areas also leave plenty of scope for entrepreneurial activity. specifically, i am referring to specialisation and mergers, and of course the subject of cost - cutting. german banks ’ cost - income ratio averaged 69. 2 % in 2016, only slightly better than in 2015 and towards the bottom of the european league table. that means there is scope for improvement. how banks go about effecting such improvements is up to each individual institution. supervisors should not get involved in the competition to see where the future of banking lies and should certainly not be responsible for corporate earnings. when we examine business models, we do so primarily under the aspect of capital adequacy. we are not the better bankers and should keep out of any business decisions as much as possible. 4. the role of supervisors in a topsy - turvy world as supervisors, we are interested, first and foremost, in a healthy and stable banking system. for this, we have a clear mandate. that certainly does not involve pleasing all credit institutions, but it does mean that we have to supervise the sector diligently and conscientiously. nonetheless, we too have some leeway in deciding when and where we impose what measures. that is particularly true when interest rates are topsy - turvy. we are therefore justified in looking to see where we can mitigate the burden for banks and savings