in any of our capitals in the european union. there are many reasons for our interest in engaging in this programme with the nbs. let me highlight some of them. serbia is a country – and more generally the western balkans is a region – whose financial sector is deeply intertwined with that of europe and more specifically of the euro area : we therefore share the same concerns for the stability of our banks. moreover, for a number of reasons – ranging from the desire of citizens to protect their savings from hyperinflation and financial fragility to intense flows of tourists and migrants – the european national currencies in the past and the euro today have played a special role in this region, including in serbia. this country – and once again, this region – must be commended for its remarkable progress in economic terms over the past years. growth has been sustained, confidence in the currencies has strengthened, the financial sector has deepened and new investment has been attracted. private economic agents have started the long march towards catching up with their competitors in the single market. at the same time, it is of the utmost importance – and i am sure governor jelasic will agree – to continue monitoring closely the remaining challenges, especially at a time when financial and economic conditions worldwide have become less supportive. the fight for economic stability is never won once and for all. serbia ’ s status as a potential eu candidate country implies that, once the conditions are met, the nbs will join the european system of central banks and, upon sustainable compliance with conditions of economic convergence, also the eurosystem. we expect the programme that is being launched today to enable us to make advances in our mutual understanding of your situation and to design together the path for your adaptation to eu standards. to this aim, over a period of nine months we will carry out a needs analysis of the current regulatory and operational framework of the nbs, as well as of its policies and practices. all of these elements will be measured against a benchmark represented by the standard institutional and operational pattern of an eu central bank ’ s operating policies and practices. in practice, experts from the ecb and the other 17 eu national central banks will undertake missions here, hold discussions with their colleagues, try to identify the specificities of your central bank, and build an understanding with you of where and how you would like to achieve progress. our experts will come as colleagues, not to judge but to support you. during these nine months, the analysis

part of our reflections on the future of macroprudential policy after the covid - 19 pandemic. these challenges relate to the creation of what we call “ macroprudential space ” and to the complementarities between monetary policy and macroprudential policy in a monetary and banking union. as i will argue, addressing these two challenges will increase the effectiveness of the macroprudential framework and strengthen the resilience of the euro area banking sector to major unexpected shocks in the future. macroprudential space the experience of the initial phase of the pandemic illustrated the importance of having sufficient releasable capital buffers in the banking sector. when the pandemic struck in early 2020, macroprudential authorities in the euro area had little room for manoeuvre to release macroprudential capital buffers. only seven euro area countries ( including the three home countries of my fellow panel members ) had enacted or announced a countercyclical capital buffer requirement above zero. in the euro area banking sector as a whole, countercyclical 1 / 3 bis central bankers'speeches capital buffer requirements accounted for only 0. 2 % of risk - weighted assets at the end of 2019. by contrast, structural buffer requirements, comprising the capital conservation buffer, systemic risk buffers and buffers for systemically important institutions, stood at 3. 4 %. unlike the countercyclical capital buffer, structural buffers were in principle not designed to be releasable. but, unlike minimum requirements, buffers are there to absorb unexpected losses and to help sustain lending under stress conditions. in short, the fact that only a tiny fraction of capital buffers has been explicitly releasable limited the macro - financial stabilisation function of macroprudential policy. banks ’ reluctance to dip into their existing buffers seems to be driven by a desire to avoid market stigma and to keep some distance from the threshold for automatic restrictions on distributions. this could be an area of concern at the system - wide level, given that recent empirical evidence of bank behaviour during the pandemic suggests that banks are less active in maintaining credit supply if they operate close to the combined buffer requirement. a contraction of the credit supply could compromise the recovery and increase the risks to financial stability. recent research by ecb staff further suggests that having higher countercyclical capital buffers at the onset of the pandemic, which could have been released during the current crisis, would