since january 2018. securitisation, which in 2008 may have appeared to be a factor for crisis propagation ( via subprime lending ), has been subject to new prudential rules, making it possible to better mitigate its risks while promoting the sound development of this instrument. the new european framework creates a label to identify high quality securitisation transactions, which meet the criteria for simplicity, transparency and standardisation ( sts label ). 1. 2 the implementation of these regulatory changes combined with financial intermediaries ’ efforts to adapt, have generated tangible signs of increased financial system resilience. for the financial system, i would like to give three examples : ( a ) significant improvement in the solvency and liquidity of banks the own funds of major french banks have almost tripled since the crisis. their common equity tier 1 ( cet1 ) ratios increased from 5. 8 % to 13. 6 % between 2008 and 2018. european banks have improved their short - term liquidity ratios, catching up with or even outstripping their international peers as from 2015. the long - term liquidity ratio for european banks is changing more slowly but, at the end of 2018, stood at around 110 %, a level higher than that required under basel rules. as regards insurance, the introduction of solvency ii has also resulted in an overall increase in the own funds of european insurers. ( b ) balance sheet consolidation and a reduction in npls continuing high levels of non - performing loans in some euro area countries pose a number of problems, since they constrain banks ’ profitability and generate provisioning needs that weigh on the level of own funds, and even a viability risk for the most fragile banks. but since the introduction of the ssm, large european banks have overall significantly reduced their outstanding npls. this outstanding amount reached eur 587 billion in march 2019, compared with over eur 1, 000 billion at the end of 2014. french banks, for their part, have always outperformed their european peers : their npl ratio has always been below the european average, now standing at 2. 8 % ( against 3. 1 % for the eu ). furthermore, french banks consistently displayed an npl coverage ratio of more than 50 % over the december 2009 - june 2019 period, well above the 45 % average for european banks. ( c ) results of the recent stress tests prudential stress tests are simulation exercises designed to assess

have become better able to absorb shocks, rather than amplify them. [ xxxiii ] well - functioning credit institutions are important platforms for economic prosperity. banks now have higher capital ratios and more stable sources of funding, and the banking system is smaller. mortgage arrears have also fallen significantly. [ xxxiv ] yes, of course there is more work to be done. and different banks are in different places. but we have all come a long way over the last decade and i recognise that. when i read about the history of the chamber of commerce here in waterford, i was reminded of the establishment of the irish banking culture board. as i mentioned earlier, in 1785 the predecessors to the chamber voluntarily taxed themselves to enhance the quays of the port. [ xxxv ] they did this to enhance the flow of trade to waterford, so more ships could dock, and more goods could be bought and sold. they took responsibility. and like the 18th century merchants of waterford who fixed the quays themselves to enhance trade, i see parallels with the creation of the irish banking culture board ( ibcb ). the ibcb is an independent industry initiative established and funded by the five retail banks in ireland with the aim of rebuilding trust in the sector through demonstrating a change in behaviour and overall culture. [ xxxvi ] it is a welcome development. it is in all our interests to have an efficient, sustainable, fair and trusted financial system. resilience through transitions the irish economy has seen a remarkable transition over the past century or so, moving from a quite closed economy to one of the most open in the world. a predecessor of mine was instrumental in this transition, particularly while at the department of finance. ken whitaker famously authored the programme for economic development, which became the blueprint for ireland ’ s transition in the 1960s. the programme “ lowered the barriers ireland had erected around itself and allowed the irish people to look at their country and themselves, not from some mystic, historically idealised vantage point, but from eye level. ” [ xxxvii ] the benefits to becoming such an open economy really became apparent in the 1990s. ireland experienced a period of sustained growth as living standards converged to european levels. measures such as gdp per capita have remained above the european union and euro area averages since the late 1990s. [ xxxviii ] this transition was not without difficulty however. the period from 1993 - 2018 saw more stable prices and greater average employment growth