inflation and the strength of monetary policy transmission. you, ladies and gentlemen, have an important role to play in the latter – in the transmission of monetary policy. you see, decisions on the interest rate for loans and deposits are made at each and every sparda - bank. in the following, i will therefore discuss the current situation facing banks in germany. 4 current situation facing banks in germany when it comes to the environment that banks are operating in, much has changed since july 2022, when the ecb governing council set the reversal of monetary policy interest rates in motion. for a start, the turnaround led to a significant improvement in net interest income for institutions, both large and smaller ones. this is because lending rates were raised swiftly and sharply. at the same time, we're still seeing a great many institutions today remunerating sight deposits at rates close to zero, just as we were used to during the 12 - year period of low interest rates. since the ecb first raised its key interest rates in july 2022, it has mainly been the smaller lenders that have put up the interest rates they pay on overnight deposits. today, they are passing on just under one - third of the increases in the market interest rate that have happened since july 2022 – in some cases, significantly more, even. given the low level of remuneration, it is not surprising that the volume of sight deposits is gradually going down overall. ultimately, this is bringing normality to the portfolio structure. you see, in the low interest rate environment, more sight deposits were being held than ever before in the federal republic of germany. up to 2010, time deposits dominated in this country. then came a reversal in the ratio : at the end of 2021, sight deposits as a proportion of banks'total deposits peaked at just under 70 %. and it is precisely here, with these sight deposits, that institutions are proving much slower to pass on the rise in interest rates than one would expect, based on earlier episodes of rising interest rates. so with interest rate pass - through in this segment playing out more slowly than was usual in the past, institutions have been able to bolster their earnings. in the meantime, though, competition for deposits has been hotting up. the market is doing its job. customers looking for better rates can stick with their current bank and shift their money from sight deposits into time deposits. or they can switch between institutions. 3 / 7 bis - central bankers

. its report does not mince its words : svb's board of directors and senior management failed. the bank ran into difficulties because it had a business model with multiple points of vulnerability : its customer base was highly concentrated, while the majority of liabilities were uninsured. added to this, there were grave deficiencies in risk management practices. but the federal reserve bank is also frank in its self - criticism – something which does it credit, in my view. supervisors failed to pick up on many of the problems at svb, despite the fact that some were public knowledge. while supervisors had been aware of unhealthy developments in risk management and governance, there was a lack of assertive intervention and, not least, of ways for supervisors to step in. i welcome the fact that the basel committee is analysing recent events in the banking sector with a view to assessing whether the regulatory framework and its scope should be adjusted in the light of what has happened. in any case, any adjustments should be 4 / 7 bis - central bankers'speeches discussed and agreed at an international level. it might make sense to probe both crisis prevention and crisis management instruments as part of this process. but, even as things stand today, the federal reserve bank's report can serve as encouragement to supervisors everywhere to apply supervisory instruments in a timely and consistent manner. this is in everybody's interests, including banks. it is important to keep an eye on the full gamut of risks : i've already mentioned interest rate risk and credit risk, but there's also operational risk to consider. as cyberattacks become increasingly frequent and we become ever more reliant on it services, more and more attention needs to be paid to sound crisis prevention. but, if the worst does end up happening, institutions need to know precisely what measures need to be taken after a cyberattack. and that's why we supervisors have, for some years now, been stepping up our ad hoc inspections focused on cyber and it risks. this involves shining a light on how hardy the banks are when it comes to these issues – i. e. their digital operational resilience. well - tuned risk management helps ensure that banks know where they stand at all times. this allows institutions to quickly spot mounting risks and potential losses and take appropriate action. at the same time, we all know that even well - tuned risk management cannot completely prevent stresses and strains. so it's important that