all this in mind, one could be forgiven for thinking that it was unethical behaviour which made the financial crisis possible in the first place. financial mis - selling and a focus on shortterm profitability were rewarded, securitisation encouraged opaque and dishonest conduct, and there was no such thing as a realistic assessment of credit risk. there ’ s another example i could mention to show that the market is incapable of regulating itself and that values, it would appear, still haven ’ t made an appearance in some quarters of the banking industry. i ’ m talking about the libor scandal – that is, the rigging of the benchmark london interbank offered rate. bankers colluded to submit fictitious interest rates so as to falsely inflate or deflate libor. this rigged rate then fed into financial transactions all around the world ; many credit or savings products are geared to the libor benchmark rate. so if you ask me whether business needs ethical values, the answer is an unequivocal and resounding yes. and as for the other question i asked just now, my answer would be a definite no. competition, in and of itself, isn ’ t enough ; we need rules to stake out a clear operational framework. leaving the market to its own devices isn't an option. but the question is whether we can achieve this simply with rules and supervision? many a new approach in the world of banking supervision is designed to do just that, but if there ’ s one thing i can tell you already, it is that they will never go far enough. because when it comes down to it, values are beliefs which each and every one of us needs to anchor in our own behaviour. and that is precisely the problem which i intend to delve into later in my speech to you today. 3 new approaches to banking supervision traditional banking supervision aims to maintain checks, create trust, and, ultimately, ensure a stable banking system with solvent institutions. however, some new approaches to banking supervision are going one step further, even if only as a side effect. i would like to introduce two of these measures to you now : first, what is known as salary regulation and, second, the task force on behaviour and culture. salary regulation governs the minimum standards for the remuneration systems of german 2 / 6 bis central bankers'speeches financial institutions. during the course of the reforms following the financial crisis, particular attention in this regard was paid to

at, namely the labour market, immigration, education and the capacity to innovate. to this list i would add the physical infrastructure. it goes without saying that an efficient infrastructure is vital for economic development. international comparisons show that germany does indeed have a good infrastructure overall, particularly in the transport sector. however, if we turn our attention away from the overall picture to the details of the individual components, shortcomings or constraints in infrastructure are clearly evident in some regions, while overcapacities may exist elsewhere. in the public debate, clear calls have been made for higher investment expenditure. but in order to use taxpayers ’ money prudently and maximise the value added for society, more public funds should be spent only after thoroughly weighing up the costs and benefits of a specific infrastructure project. not every investment undertaking is worth the money, as you as entrepreneurs know all too well. and that applies to public investment as much as it does to private investment. at the same time, higher public investment spending should be counter - financed by making savings elsewhere. because demographic change also makes heavy demands of public finance – and i will come back to that in a moment. ladies and gentlemen, to promote growth and competition more strongly also requires measures that make business start - ups easier and remove barriers to market entry. a constituent element of our market economy is that enterprises must also be allowed to fail and, in consequence, to exit the market. at the end of the day, only if entrepreneurs are held liable for their business decisions will they make those decisions responsibly. yet it is crucial for market processes that new enterprises step in to replace those that fail. the economist joseph schumpeter, who died in 1950, called this concept “ creative destruction ”. where no new businesses are set up, however, a market economy loses its creativity – with negative implications for innovation and growth as well as for employment and income opportunities. there is still considerable scope in germany to facilitate new business start - ups, as is shown – for instance – by the table the world bank prepares once a year as part of its doing business report. in the sub - category of the report that compares the time, cost and procedures involved in setting up a new business, germany ranks a lowly 114th – faring markedly worse than many other euro - area countries. bis central bankers ’ speeches conversely, this means that measures to ease the process of establishing a new business and, where necessary, of removing red tape