lending to the economy even if truly adverse scenarios materialise, as shown by the ecb ’ s vulnerability analysis published in july 2020. this shows that in the field of banking regulation, we did not waste the previous crisis and learnt our lessons well. my second point relates to regulatory response. the relief package that the ecb banking supervision announced in march was designed to ensure that banks can keep lending to the contracting economy. for instance, banks were allowed to temporarily operate below the level of capital defined by the bank - specific pillar 2 capital requirements, namely pillar ii guidance. 1 / 2 bis central bankers'speeches in lithuania, macroprudential policy was a key domain of the regulatory response package. prior to 2020, critics would say that our macroprudential set - up was perhaps too wide - ranging. but this crisis showed, i believe, that our policy stance was the right one. first, it helped prevent a deterioration in lending standards and a build - up of systemic risk in the run up to the covid - 19 shock. and second, when the time came, we implemented countercyclical policy decisions in line with the intended functioning of the framework. for instance, in mid - march, the bank of lithuania fully released the counter - cyclical capital buffer from 1 % to 0 %. overall, the relaxation of various requirements has increased the lending potential of banks in lithuania by €2 billion, or by a third, compared to 2019. of course, we are talking about potential here, not the real world. but the real - world data has been encouraging, at least in terms of lending to households, which has broadly returned to the pre - pandemic levels. going forward, policymakers should not “ waste a good crisis ” this time as well, and take a fresh look at the existing macroprudential framework. we could even consider novel ways of applying macroprudential tools – such as the application of borrower - based measures during the cycle, e. g. relaxing the loan - to - value or debt - service - to - income requirements in times of crisis. finally, i would like to make a point on the long - term issues of the european banking sector. the first issue here is inadequate bank profitability. in this regard, there is a need for consolidation via mergers and acquisitions to make the european banking sector leaner. completing the banking union by creating a european deposit insurance scheme ( edis ) would open doors for true

financial technology the european commission has already launched a public consultation aiming at update and amendments of the settlement finality directive1. in addition, review of other basic legal acts related to payments as the payment services directive2 and the electronic money directive3 is expected to start by the end of 2021. i wish interesting and fruitful work to the participants in the video conference. directive 98 / 26 / ec of the european parliament and of the council of 19 may 1998 on settlement finality in payment and securities settlement systems 2 directive ( eu ) 2015 / 2366 of the european parliament and of the council of 25 november 2015 on payment services in the internal market, amending directives 2002 / 65 / ec, 2009 / 110 / ec and 2013 / 36 / eu and regulation ( eu ) no 1093 / 2010, and repealing directive 2007 / 64 / ec 3 directive 2009 / 110 / еc of the european parliament and of the council of 16 september 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending directives 2005 / 60 / ec and 2006 / 48 / ec and repealing directive 2000 / 46 / ec 2 / 2 bis central bankers'speeches