who else, if not creditors, would be more suited to pushing governments to take a sustainable financial path? why should we expect states to leave the welltrodden path of least resistance – which is expanding debt instead of committing to painful reforms – when there are no regulatory restrictions such as a non - zero capital requirement for sovereign bonds in place that provide actual incentives to do so? so whatever transitional challenges there may be, they don ’ t make the idea of a more riskadequate treatment of sovereign bonds less of a desirable ultimate aim. also, framing the reform as a mere distribution battle between member states is deceptive. in the long run, everyone stands to benefit from a sustainable order. instead, we need to focus on change management. how do we smooth the transition toward a sustainable financial order? in my view, just as nobody should want a drug addict to die from going “ cold turkey ", we should take into account the challenges facing those who will be worst affected by a change in regulation – and offer demanding, but feasible transition schedules. of course, regulation of sovereign risk is also a global issue. any framework of rules for the financial sector these days needs to be comprehensive and consistent. there is a straightforward and sobering reason for this : you can count on the global financial industry to quickly locate regulatory gaps. the basel committee has put sovereign risk on its agenda for 2017 and 2018. i strongly welcome this step, and call upon all parties to work together to find a good solution. for the euro area, reforming the regulation of sovereign risk will be even more vital. this is because a currency union is particularly vulnerable to national distress in case that market forces break down. a common currency, for example, does not allow currency depreciation as an automated correction mechanism. therefore, achieving reform towards better self - governance in the banking sector, markets and state finance will be an indispensable step towards a more sustainable euro area. 5. conclusion ladies and gentlemen i have listed several organisational challenges which the ssm will need to come to terms with, if it is to live up to its character as a network. 1. national authorities need to honour their staffing commitments, because these are what drives the operational functioning of the ssm. 2. we need to remove boundaries between supervisors in their daily routines with a view to nurturing a “ one - team ” culture. 3. we need to enhance our language skills to account for the cultural diversity that is part and

payments by card or by smartphone, as well as online purchases appeal to the young, technology - savvy generation in particular. these means of payments are on the increase, but they are by no means undergoing rapid growth. one factor that probably plays a role here is that, in contrast to what some believe, cash is not a particularly expensive means of payment. in terms of costs per transaction, cash payments are much cheaper than both debit card and credit card payments. as for costs in relation to the transaction amount, which generally tends to be higher when making payments by card, cash is admittedly more expensive than debit card payments, but is still cheaper than making payments by credit card. as you can see, there are a number of strong arguments that speak in favour of cash. it is hardly surprising, then, that surveys show that more than three - quarters of the population – or even more – state that they could not do without cash. bearing that in mind, i would consider it disastrous if the general public were to be given the impression that the mooted abolition of the €500 note and imposition of caps on cash usage were the first steps towards abolishing cash entirely. all eyes may be on cash right now, but it would be unwise to ignore the far - reaching changes that may well transform the area of cashless payment systems at some point in the future. blockchain technology is seen as the key innovation in this regard, allowing as it does values to be transferred cheaply and comparatively anonymously, while bypassing centralised authorities such as banks, card companies and clearing houses. similarly, i can also well imagine that it will soon be possible to use digital currencies, such as bitcoins, which are based on this technology, to trade in financial products, such as shares, bonds or derivatives in decentralised systems. this would, of course, present a challenge for the existing payment and settlement systems. it therefore stands to reason that not only financial service providers, but also central banks are investigating whether this very interesting technology is actually suitable for mass use. this is why the bundesbank is, inter alia, also a member of a working group on this topic at the bank for international settlements in basel. 7. bundesbank ’ s profit and risk provisioning ladies and gentlemen, in closing i would now like to come to our annual accounts and thus also to the bundesbank ’ s profit last year. the