the finnish stability authority as the national resolution authority. the model is similar to the u. s. sheltered harbor solution, with which some of you might be familiar. 2 / 3 bis - central bankers'speeches for the second scenario, the bank of finland created a facility that enables our banks to transmit interbank payments even if cross - border resources are not available. what is significant is that we managed to ramp up our preparedness for the most severe scenarios in the span of a couple of weeks and months last spring. the required legislation obliging banks to maintain capability to connect to these systems was passed on the last day of parliament's spring session in early july. the key success factors here were the analysis on possible backup solutions that was carried out in previous years and the unanimous determination to ensure the resilience of basic banking services in all circumstances. slide 5 ladies and gentlemen, i have briefly explored how finland resilience builds on an all - encompassing culture of preparedness, also covering the financial sector. this has allowed us to react swiftly to the changing geopolitical and security situation in europe, including the decision to apply for nato membership together with sweden in may. acceptance of our membership has been delayed due to the lack of ratification in turkey and hungary. while not yet critically damaging, these delays of course play to the hand of putin and risk weakening the credibility of liberal democracies'unity. our own national capabilities form the basis of our crisis response, but international cooperation is equally important. in this regard, europe has not stood idly by. many vulnerabilities still need addressing, however. it is imperative that we heed the lessons of russia's aggression and its war in ukraine, especially in the energy and financial sectors. it is telling that since february 2020, google searches for'resilience'have risen to new highs and have stayed elevated ever since. in matters of resilience, we look for safety, we look for predictability and we look for a sense of control. the early 2020s will be remembered for the pandemic and russia's war. our response to these crises will determine what the rest of the decade will look like. thank you. 3 / 3 bis - central bankers'speeches

##ylised classification of structural proposals : activities and strength ] ecb official prepares to perform triage on europe ’ s banks, interview with ignazio angeloni in international new york times 21. 10. 2013. gandhi and lustig, “ size anomalies in u. s. bank stock returns ” doi : 10. 1111 / jofi. 12119. bis central bankers ’ speeches on capital requirements another important issue which has been much discussed also recently is that regulations need to be robust enough. robustness of capital requirements is needed because there will always be errors in risk measurement, and managerial incentives to manipulate riskweights downwards will always be there. 18 one answer is to add capital requirements which are not based on risk - weights, to complement the risk - based ones. an important example is the leverage ratio requirement of basel iii. our group also considered, although did not directly propose, additional robust capital requirements on trading activities. if these were calibrated so that the robust requirements formed the bottom and the risk - based requirements came on top of that, then banks ’ incentives to keep on improving their risk measurement technologies might be better maintained. the basel committee on banking supervision is still considering the merits of introducing the standardised approach as a floor or surcharge to the models - based approach. 19 of the proposals for how the market risk framework could be altered recently presented by the basel committee, i particularly welcome two key features. first, the suggestion of revising the standardised approach to be sufficiently risk - sensitive thus creating a credible alternative to the internal models. and second, the requirement of mandatory calculation and publication of the standardised approach by all banks, which would improve transparency and comparability. note that separation of trading - based risks from deposit banking can also be seen as a form of robust regulation. if potential errors in the measurement of trading risks may prove fatal to core banking services, it may be better to move the risks elsewhere altogether. this is what separation does : it compartmentalizes risks within the banking group, a bit like firewalls help restrict the spreading of fire. a combination of structural reforms with capital and liquidity buffers may be a cost - effective way of regulation in the long - run. taking into account both public and private costs, bank equity capital is not as costly as one might deduce from banks ’ preference to use very high levels of debt financing. this point has been carefully scrutinized by admati and