11. 05. 2023 the financial system : current situation and challenges ie university – banco de espana – federal reserve bank of saint louis conference : current challenges in economics & finance madrid pablo hernandez de cos governor thank you very much to the organisers for inviting me to this conference. today, i will be addressing you in my capacity as chair of the advisory technical committee of the european systemic risk board ( esrb ), 1 a role which brings a deep eu - oriented perspective, complementary to my regular responsibilities as governor of the banco de espana and member of the governing council of the european central bank. the macrofinancial risk landscape and the banking sector the macrofinancial risk landscape has changed in recent months and continues to evolve. in a relatively short period of time we have moved from low inflation and low interest rates to persistent high inflation and rising interest rates. this shift poses new and enhanced risks to financial stability. to heighten awareness of these risks the esrb adopted a warning2 on vulnerabilities in the eu financial system in september 2022. this is the first general warning ( i. e. addressed to all eu member states ) that has been issued by the esrb since its establishment in 2010. over the last seven months some economic developments have surprised to the upside, while some vulnerabilities timely identified in the warning have come to the fore. on the positive side, the eu economy proved to be more resilient than expected in the face of the large negative terms - of - trade shock from russia ’ s war in ukraine and growth forecasts for 2023 were revised upwards. however, developments last autumn in the uk gilt market and, more recently, in the us and swiss banking sectors remind us of the need to remain vigilant in regard to vulnerabilities in a challenging and rapidly changing macro - financial environment. in this context, let me explain the esrb ’ s view on the key risks affecting the european union ’ s financial sector. the aforementioned esrb warning set out four key risks to eu financial stability : 3 • the challenging macroeconomic outlook coupled with elevated geopolitical tensions underscores the importance of a prudent management of credit, market and funding risks in the banking business. • an environment of still subdued growth prospects and elevated inflation may put firms'and households ’ balance sheets under stress. • vulnerabilities in the non - bank financial sector could trigger asset price corrections and amplify vol

niklaus blattner : system stability and security of the systems summary of a speech by prof dr niklaus blattner, vice - chairman the governing board of the swiss national bank, at the luzerner tage fur informationssicherung ( lutis, conference on information security ), lucerne, 25 may 2004. the references for the speech can be found on the swiss national bank ’ s website. * * * the stability of the banking system and the security of the financial market infrastructure - including the stock exchanges and especially payment and securities settlement systems - have become an important concern of central banks all over the world in recent years. this has notably happened against the background of the numerous financial crises witnessed during the past decades. moreover, events such as 9 / 11 have heightened awareness for the security of the financial markets and other infrastructures. in switzerland, the growing importance of system stability has also been reflected in the new national bank act, which entered into force on 1 may 2004. within the framework of its principal mandate of pursuing a monetary policy in the interests of the country as a whole while at the same time ensuring price stability, the swiss national bank ( snb ) is legally obliged to make a contribution to system stability and to facilitate and secure the operation of cashless payment systems. in implementing its mandate, the snb takes preventive measures as well as measures aimed at overcoming crises. for instance, in a crisis the national bank plays an important role in providing liquidity. with the new act, the snb specifically bears the responsibility of overseeing the systemically important payment and securities settlement systems. the operators of such systems will in future have to meet certain minimum requirements, which will also include requirements with regard to information security. secure and reliable information and communications structures are an essential precondition for the smooth functioning of the financial system. in the context of its mandate, the snb limits itself to systems - relevant aspects in these areas. systems - irrelevant problems concerning individual banks or payment systems, by contrast, are explicitly not a part of its mandate. this is based on the conviction that the problems in the financial system must be solved by the market itself whenever possible.