leonardo badea : on financial ( in ) stability and systemic risks in a world with high uncertainty and multiple disequilibria closing remarks by mr leonardo badea, deputy governor of the national bank of romania, at the15th edition of the seminar on financial stability issues " on financial ( in ) stability and systemic risks in a world with high uncertainty and multiple disequilibria ", sinaia, 4 october 2024. * * * distinguished guests, esteemed colleagues, ladies and gentlemen, first of all, allow me to express my sincere regrets for not attending the seminar in person, due to an overlap with the last meeting of the national bank of romania's board, in the current mandate. i am, however, pleased to have had the opportunity to join you virtually today, following the stimulating discussions that took place in sinaia. as we conclude the 15th edition of the seminar on financial stability, i wish to express my sincere appreciation to all of you for your active engagement and valuable contributions. over the past few days, there were explored a wide range of critical issues that shape the stability of the global financial system, from the main challenges faced by policymakers in the current geopolitical context, to the evolving risks of digital finance or the vulnerabilities in the real estate sector. financial stability today goes beyond managing traditional risks such as liquidity, credit or real estate booms ; it now requires an understanding of technological advancements, climate change, and geopolitical uncertainty. moreover, mounting fiscal imbalances and high levels of both public and private debt in many countries represent other elements to closely monitor. the first panel provided an excellent coverage of the key systemic risks we are currently facing, along with the challenges they pose to financial stability. with that in mind, the natural question arises regarding the appropriate measures to implement. in this context, the second panel took a deep dive into the topic by exploring the effectiveness of macroprudential policy. considering the vulnerabilities observed in housing markets across the globe, we gained valuable insights from the panel's examination of potential spillover effects from the real estate sector on financial stability. lastly, i found the dynamic discussions on emerging challenges particularly engaging, especially regarding the interaction between the rapid advancement of ai technologies and the stability of the financial sector. as emphasized in today's panel, artificial intelligence has the potential to fundamentally transform financial systems and is swiftly 1 / 3 bis - central bankers'speeches evolving into a

deposits, while 2. 7 % depositors have 60 % of total deposits ) ( figure 11 ) ; - access to mortgages : skewed distribution of access to mortgages ( figure 12 ) ; less than 1 % of the 1st quintile, less than 2 % of the 2nd and 3rd quintile. even in the top quintile the access to mortgage is 12 %. aggravating factors : high share of mortgages in foreign currency ( more than 2 / 3 before the crisis ) and at variable rates ( more than 90 % ) ; - inequality data show that a large part of the population cannot afford to buy a new house in the absence of a stock of savings and that at least the first two quintiles of households struggle with the living costs in the houses they currently own ; - because of the lack of access to bank finance, some low to middle income households resort to loans from non - bank financial institutions ( nbfi ), which have very high interest rates on very short maturities. this behavior leads to further exclusion from bank - related financial services, because of very high debt servicing costs for the nbfi loans. - inequality matters also for the transmission of monetary policy to the economy. for example : marginal propensity to consume, which determine household responses to a change in interest rates, varies with income. household access to banks or financial markets which is typically limited for low - income households defines who will be directly and indirectly affected by changes in interest rates, and thus who will react more strongly to monetary policy impulses. more generally, household response to changes in monetary conditions depends on each household ’ s income and indebtedness profile ; that is, on their disposable income profile. all these variables indicate that two different income distributions can potentially induce many different impacts on the economy for the same monetary policy1. access to credit has improved after the crisis, mainly due to lower interest rates ( figure 13 ), income growth ( in particular for low - middle income households ) and the introduction of a state - guaranteed “ first house ” program ( figure 14 ) ( which mainly compensated for the lack of savings by allowing for a very low advance payment ). when “ first house ” program was changed to allow only local currency guarantees, the share of local currency mortgages skyrocketed ( figure 15 ), reducing the vulnerability of foreign exchange evolution, but increasing the risk of a future interest rate shock on low - middle income