%, which, while still high, is certainly manageable. nevertheless, there is still room for greater consolidation because their cost ratios, while not the highest in the euro area, are still too high. profitability remains weak, although there are substantial differences between banks. while there is a need for more consolidation, preserving a diverse banking system, with both large and local banks, remains important. the banks are blaming low rates for their reduced profitability. yes, they are, but at the same time they are also recognising the favourable effects of low rates on improved economic conditions and the need to change business models and reduce costs. over time, the economic recovery will increasingly support bank profitability. the deposit rate will remain low, but the last series of targeted longer - term refinancing operations ( tltros ) that helped banks have already come to an end. the banks benefitted greatly from these operations, which were heavily subscribed. the transmission of the ecb ’ s stimulus measures through the banks is working well at the moment. credit conditions have improved sufficiently, so there is currently no need to renew the tltros. and what about the sequencing of monetary policy normalisation? the current sequencing of monetary policy normalisation makes a lot of sense. there is no number, period of time in months or anything like that which will determine when interest rates go up after the debt purchases end. this will happen based on the ecb ’ s assessment. it will depend on the kind of situation we find ourselves in. and the deposit rate? the deposit rate is the key monetary policy rate. it is the deposit rate that is currently driving monetary conditions and will in the end shape the risk - free asset curve. if the markets were to pick up any change in communication about the deposit rate, it would have the potential to change the policy stance, and we do not want that to happen right now. 3 / 3 bis central bankers'speeches

platform for setting up a single european market for securities services. in terms of benefits for europe, t2s will make the post - trade environment safer and more efficient. it will reduce the cost of settling securities transactions and bring about significant collateral savings for market participants. these collateral savings are particularly valuable at a time when demand for high - quality collateral continues to increase, as a result of both the crisis and new regulatory developments. but reaping the full benefits from the launch of t2s requires that it is complemented by the provisions laid out in the csd regulation proposed by the commission. both initiatives are supported by the harmonisation agenda which has been advanced by the eurosystem and other european fora. the csd regulation is critical to post - trade harmonisation efforts in europe. the ecb ’ s governing council has stated its strong support for the proposed regulation, which will enhance the legal and operational conditions for cross - border settlement in the eu in general and in t2s in particular. in this respect, the ecb has recommended that the proposed regulation and the corresponding implementing acts are adopted prior to the launch of t2s. work is also in progress at the eurosystem level to improve the possibilities for the crossborder use of collateral for eurosystem credit operations, which will increase efficiency. further benefits are expected from market - led initiatives to enhance the interoperability of triparty services in europe. i do not want to pre - empt the interesting discussions that you will have today, so let me conclude by saying that everyone needs to be involved in this process. every contribution matters ; and every action is relevant. i am confident that today ’ s conference will further clarify the role that each of us has to play in this important phase of european integration, and i look forward to continuing to work on it together. thank you very much for your attention. bis central bankers ’ speeches