77 interventions since 1997 : only one case involved a depositor payout, while the remaining 76 were interventions other than payout ( 24 alternative interventions and 52 preventive interventions ). 4. international experience the key role of dgss in crisis management is also confirmed in some major non - eu jurisdictions. in the us, for instance, the dgs ’ s support for the transfer strategies is a pillar in the framework and was successfully used for almost a century, including recently in the early 2023 crises. between march and may 2023, three large regional banks were closed and resolved with a purchase and assumption ( p & a ) transaction and with sizeable support from the federal deposit insurance corporation ( fdic ). 7 to facilitate the resolution of financial institutions, the deposit insurance corporation of japan ( dicj ) has provided financial assistance in 182 cases and injected capital into 34 financial institutions so far. 8 5. changes in the banking environment the banking environment has changed in recent years. technological innovation is perhaps the main driver of change. on the one hand, it is leading credit institutions to adapt their business models and rethink the ways they provide banking services, both in response to customers ’ new expectations and to changes in product customization and customer service. it is also creating new opportunities in terms of profitability, thanks to efficiency gains and cost reductions. 9 on the other hand, it poses challenges. corporate governance systems should be strengthened in order to increase the digital literacy of management and supervisory bodies. moreover, technology increases the use of outsourcing ( and the associated risks ) as well as competition between intermediaries. 10 finally, financial stability concerns may arise. indeed, the digitalization and internationalization of finance, while providing access to fast payments ( including instant bank transfers ) and mobile banking, may also lead to the amplification of concerns through social media, causing considerable and unexpected deposit withdrawals and risks of bank runs. specifically, the fdic intervened to support the transactions, with a total cost of more than $ 40 billion ( estimated as of 31 december 2023 ). while one intervention ( first republic bank ) was carried out under the least cost requirement, the systemic risk exception was invoked in the other two cases ( silicon valley bank and signature bank ), so the fdic could deviate from the least cost principle. see dicj, annual report 2022 / 2023. many banks are using technology to replace traditional channels. the resulting efficiency gains are bringing

up, as all participants, wary of the unknown exposures of all others to the leveraged risk - takers, pull back. but this maintenance of liquidity and the smooth functioning of markets has become central to financial stability because even as regulated institutions have become more sound, they and other participants have come to rely more on markets for their own risk management. hence dislocation can have serious consequences. i am sceptical, incidentally, of the argument that hedge funds and the like necessarily add to liquidity. liquidity means being able to change a position without affecting the price, and depends on someone being prepared to make a price. hedge fund activity adds turnover, which probably means that in good times there is more incentive for price makers. but under conditions of pressure, leveraged investors are more likely to need to use the liquidity of the market than to be able to contribute to it. on such occasions – which is when liquidity is needed most – these funds surely are liquidity takers, not providers. additionally, there is, as tim acknowledges quite clearly, an inherent conflict over certain time horizons between market discipline and competition for business. precisely because hedge funds et al do add to turnover, they have considerable business to direct to financial intermediaries. when the money is flowing into the big funds, and returns have been high, they are more likely to be able to dictate the terms on which the various banks, investment banks, prime brokers and so on can get a share of that business. at those times, market discipline is likely to be eroded. in fact, this raises much broader issues of risk perception and management than hedge funds per se, and here tim makes some very good points. in particular, the emphasis on tail events, and on the uncertainty which surrounds estimates of potential losses, is very well targeted. risk management techniques need to extend beyond calculations of vars and the like – as complex as such calculations already are – and to think about whether the possible size of losses associated with the one - in - a hundred event really are well described by standard distributions drawn from recent history. they need also to contemplate the possibility that the correlations between portfolios will in the future be different from those in history. this point takes on more importance, in my judgement, against the backdrop of the remarkably benign environment of the past decade in many countries. as tim notes, a succession of financial events have been absorbed by capital markets with apparent e