accepting card payments. we are not yet there with the sepa for cards, i. e. a harmonised, competitive and innovative european card payments area. without wanting to pre - empt the discussions at this conference, i would first like to highlight three areas that are critical to the realisation of the sepa for cards : standardisation, interoperability and security. secondly, i would like to touch upon the issue of innovation and how it will impact cards. sepa for cards : standardisation, interoperability and security in 2015 the euro retail payments board ( erpb ) took stock of the market initiatives which are developing technical standards for payment cards in the eu, basing its conclusions on a detailed report by the cards stakeholders group. as a result, the erpb issued some recommendations on the implementation of the requirements developed in the sepa cards bis central bankers ’ speeches standardisation volume ( scs volume ) in respect of different domains ( terminal - to - acquirer, card - to - terminal, terminal security ). progress with these recommendations will be further monitored. interoperability concerns both the technical compatibility of cards and card terminals ( one of the domains for which the erpb has issued recommendations ) and cards processing. given the presence of multiple card schemes, multiple banks and multiple processors in europe, the eurosystem has repeatedly called for the development of a framework for the processing of card payments as well as an interoperability framework for sepa - compliant card transaction processing. the technical interoperability of card processors and card schemes – based on european standards – is a key issue when it comes to realising the sepa for cards. and technical interoperability is required by the eu ’ s regulation on interchange fees for card - based payment transactions ( ifr ), which will apply as of june 2016. schemes and processors that want to survive in the sepa for cards will have to become “ pan - european ” by moving towards interoperability based on european standards. as regards the third critical area, security and the fight against fraud related to card payments in sepa countries have been high on the agenda of the eurosystem. the work of france ’ s observatoire de la securite des cartes de paiement ( observatory for payment card security ) has been a benchmark in that area. furthermore, since 2012, the ecb has published the eurosystem ’ s findings on card fraud in an annual report.

they set up an appropriate risk management system that takes account of solvency ii. at the same time, the advance of insurers is intensifying competition in these markets, and this, too, is transforming the environment in which banks operate. 4. german real estate market gaining momentum in a low - interest rate environment, developments on germany ’ s real estate markets warrant particular attention. the real estate loan is a heavyweight element of financial stability. real estate loans make up over two - thirds of households ’ debt. conversely, they account for 40 % of total domestic lending ; in the case of savings banks and credit cooperatives, this share is as high as around one half. residential property prices are rising at an accelerated pace in urban areas. the observed set usually comprises a group of seven large cities : berlin, cologne, dusseldorf, frankfurt am main, hamburg, munich and stuttgart. in 2011, prices rose by over 9 % on average for new residential property in these cities and by 7 % for pre - owned property. the upward trend appears to have continued in the first half of 2012. this is shown in a narrower definition which comprises only owner - occupied dwellings. prices in this segment are expected to rise by an average of around 11 % this year, and thus even somewhat more sharply than last year, when they went up by just over 8 %. special factors are also at play here. savers are increasingly channelling their funds into forms of investment which they view as a hedge against monetary and exchange rate instability. price exaggerations therefore cannot be ruled out in individual regional market segments. all the same, there are no signs yet of a rapid build - up of risks to financial stability in germany. the guideposts are : bis central bankers ’ speeches • first, households ’ robust debt sustainability ; their debt in relation to disposable income has been on the decline for years. • second, the moderate growth in loans ; housing loans rose by only 1. 2 % last year. • third, the conservative terms of housing lending in germany with longer interest fixation periods and limited debt financing shares. however, the mortgage lending of regional credit institutions is showing a tendency towards local concentration. 5. shadow banking system : small in germany, but globally active the search for additional risk factors which contributed to the financial crisis inevitably leads us to the shadow banking system, which, as we know, played a major role in the spill - over of the subprime exaggerations