would lead to the immediate disruption of the bank ’ s core activities. assets would have to be disposed of quickly at fire sale prices and collateral would have to be enforced ; non - insured liability holders would have to face long delays to obtain only partial reimbursement ; borrowers – especially small enterprises – could be exposed to liquidity constraints, which could then evolve into solvency problems. confidence in other banks could be shaken, amplifying the risks for the economy at large. unsurprisingly, disorderly piecemeal liquidation has so far been largely untested. • at present, there is nothing in the eu crisis management framework to prevent the difficulties of a non - systemic bank from evolving into a disorderly piecemeal liquidation. this fundamental weakness of the framework has not gone unnoticed. in the financial sector assessment program for the euro area, the imf called for a common legal framework for liquidation featuring “ purchase and assumption ” transactions ( a transfer of business – assets and liabilities, business branches and legal relationships ) supported by a european deposit guarantee scheme. the imf argued that a transfer of assets and liabilities, instead of a piecemeal liquidation, would reduce the destruction of value and ensure a level playing field for creditors. • ensuring that adequate and proportionate solutions exist to manage the failure of banks, while preserving their franchise value, is among the objectives that the european commission intends to pursue, as part of the agenda for the completion of the banking union. this would be a key step to increasing the effectiveness and efficiency of the crisis management and deposit insurance frameworks. • one fundamental question concerns the sources of funding to finance a transfer strategy, be it in resolution or in liquidation. under the current brrd framework, a successful resolution strategy premised on the bail - in tool requires adequate levels of eligible liabilities ( minimum requirement for own funds and eligible liabilities, mrel ), preferably subordinated, to avoid losses being imposed on depositors and other retail creditors. • however, most medium - sized banks ( not to mention smaller ones ) are not equipped to tap capital markets in order to issue mrel instruments. around 70 per cent of the significant banks under the direct supervision of the ecb are not listed, 60 per cent have never issued convertible instruments, and 25 per cent have not even issued subordinated debt. these shares rise sharply, of course, for smaller institutions. requiring these banks to issue mrel - eligible liabilities to

for the global economy. from a long - term perspective, the world has become more and more peaceful and nonviolent over the last decades and centuries. 7 furthermore, poverty and diseases have been on a spectacular decrease around the globe, even if the pandemic has interrupted this trend. last but not least, we already have most https : / / www. economicsandpeace. org / wp - content / uploads / 2022 / 06 / gpi - 2022 - web. pdf of the technological means to tackle climate change. the investment needs for the green transition may sound overwhelming, but the private and public funds to be mobilized only amount to about 2 % of global gdp per year. 8 this sum roughly corresponds to the estimated investment gap that advanced economies have accumulated over several decades, and it is dwarfed by military expenditures in war times. in short, humankind ’ s problem - solving skills should give us confidence for the future. now, allow me to introduce our first keynote speaker : graciela kaminsky, professor of economics and international affairs in the department of economics and elliott school of international affairs of george washington university. on top of her academic career, graciela, for instance, worked as a staff economist for the board of governors of the federal reserve system. she has been a visiting scholar at the central banks of japan, spain, hong kong and singapore and a consultant to the inter - american development bank, the imf and the world bank. holding a ph. d. in economics from mit, professor kaminsky has published widely in leading academic journals, such as the american economic review. her research covers a variety of topics in macroeconomics and international finance, including financial globalization, currency and banking crises, as well as inflation stabilization policies. she is now going to talk about “ rare disasters – current and future vulnerabilities in eastern europe ” and compare the current crisis with crises from the past 200 years. i very much look forward to this first talk and wish us all a stimulating conference. dear graciela, the floor is yours. https : / / royalsocietypublishing. org / doi / 10. 1098 / rspb. 2015. 0820