requires time for a painstaking, extensive analysis of whether the expected synergies and efficiencies are actually realisable with the two particular organisations concerned. beyond analysis and efficiency, mergers or acquisitions is about people. if you forge incompatible cultures into one company, this is unlikely to generate synergies and economies of scale. rather, it will lead to governance problems. but, consolidation can be fruitful, when banks find the right partners. successful cases show that regional or business line compatibility provide a great source of synergies. selected acquisitions and sales of business lines can be a good instrument to strengthen a solid and focused business model. again, careful analysis of the viability of synergies and efficiency improvements are a precondition for any such transaction. one aspect strikes me as being very important. merging ailing institutes with healthy ones is certainly no panacea. certainly not in the eyes of bank supervisors. it may even entail risks for the healthy party of the merger. while mathematically two minuses make a plus, this is not at all the case with mergers. moreover, creating further institutes that are too big to fail is certainly not an attractive option that would be accepted by supervisors. 4 / 5 bis central bankers'speeches likewise, mergers & acquisitions cannot absolve banks from dealing with the economic challenges i discussed earlier. whether merged or not, becoming more efficient and profitable is an inescapable challenge for many institutes. essentially, mergers & acquisitions may very well be a part of and support the banking sector ’ s adjustment process, but it cannot be the main carrier of it. it can help where healthy institutions see the possibility to create synergies in a new environment, but it cannot, and should not, solve problems. this implies that careful management decisions are key. and management, in turn, will rely on the astute advice of professional mergers & acquisitions specialists. 5 conclusion ladies and gentlemen europe ’ s banking sector is healthy. but when the market sneezes, expect some banks to catch a cold. if we want to prevent unjustified contagion, then we need first to stay calm. we should take the time to consider the facts instead of piling on what is clearly exaggerated sentiment. and yet we live in challenging economic times. to do business successfully and sustainably in this environment is an enormous task. many banks are facing problems created by demographic change, digitalisation, ultra - low interest rates and enhanced banking regulation

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