be exposed as a result of participating in monetary union. at the same time, however, the no - bailout clause is designed to help enforce the liability principle on the market for government debt. the no - bailout clause also served as a warning to private creditors that the member states are solely responsible for their finances, even in times of crisis, meaning that government bonds do not constitute a risk - free investment. now, these two pillars have clearly not been enough to safeguard sound public finances. one reason for this is the weak binding effect of the fiscal rules, with repeated breaches leaving them permanently impaired. germany was one of the primary culprits here, having worked together with france in the first half of the 2000s to water down the rules of the stability and growth pact. on balance, however, the second pillar was also too weak : the capital markets ’ disciplinary effect on euro - area countries proved to be inadequate. the capital markets had assumed that the euro area was a union with a common destiny and that, despite the existence of the no - bailout clause, its member states would provide financial assistance to one another in the event of a crisis. despite the huge disparity in economic power and indebtedness between the member states, they therefore paid similar levels of interest on their debt prior to the crisis. however, it is also worth remembering that, although some of the countries that later found themselves in need of financial assistance were indeed experiencing rising macroeconomic imbalances prior to the crisis, their public finances were only actually thrown off track when the 2 / 13 bis central bankers'speeches banks were bailed out. it ’ s worth keeping these root causes of the crisis in mind as i now look back at how the crisis has unfolded since 2007 and later ask what remains to be done in order to put an end to the crisis once and for all. 3. flashback ladies and gentlemen in 2007, we germans became acquainted with a term that, at most, only financial market experts had previously ever heard of - and even they were likely unaware in many cases of the risk involved. i ’ m talking about subprime mortgages. this was the name given to mortgages issued to borrowers in the united states with low - in other words, not “ prime " - credit ratings. it goes without saying that the term “ subprime ” was a euphemism, as loans were granted en masse to households whose credit ratings could be charita

reinhart and rogoff, would in any case argue that financial crises are always recurring phenomena. they write about speculative bubbles which occurred a long time ago, such as the tulip mania in holland in the 17th century or the south sea bubble in the 18th century. and just a few years before the subprime crisis, the new economy bubble burst. and so the recent financial crisis will not have been the last crisis that we encounter. this is assured by the “ this time is different ” syndrome, as described by carmen reinhart and kenneth rogoff. its core consists “ of the firm belief that financial crises only happen to other people in other countries ; a crisis cannot occur here and now in our country. we are doing things better, we are smarter, we have learned from past mistakes. " but even if we do not fall for the “ this time is different ” trap, even the best economists in the world are not exactly sure what will trigger the next crisis. maybe the next crisis will be triggered by cyber attacks or hacker attacks and not by risks in banks ’ loan books. after all, the increasingly digitalised nature of financial market infrastructures is leaving our financial system increasingly exposed to such risks. and in contrast to the usual credit risks, where the default of a single creditor does not as a rule profoundly shock a bank, it may even be enough under certain circumstances for one of the many cyber attacks carried out on a daily basis to succeed and to paralyse the activities of a bank for a while, thereby throwing the financial system into disarray. and that is why it is so important to place a greater focus on the potential dangers associated 6 / 13 bis central bankers'speeches with cybercrime than has been the case to date. the federal ministry of finance and the bundesbank have therefore put cyber security on the g20 agenda. and last week ’ s events have underscored the wisdom of this decision. but perhaps a new crisis is brewing elsewhere. however, knowing how difficult it is to accurately predict a crisis certainly does not give us a licence to just sit back and do nothing about it. the very least we can do is to draw the right conclusions from past crises. the aim is not only to eliminate individual risk factors but to make the financial system more robust as a whole, so that future crises no longer result in such dramatic consequences. and so we now come to the question “ what have we done to reduce our vulnerability to