. debt levels range from close to non - existent in estonia, to 175 % of gdp in greece, though we know that headline number to be somewhat inflated. of course, while public debt levels offer a useful indicator of the fiscal space governments have available to fight the crisis, they are a narrow indicator of countries ’ overall resilience. this also depends on other factors, such as growth potential and household and corporate debt levels. these also differ widely across the euro area. looking at banks, we know that, in terms of capital buffers, banks are in a better position than in 2008. yet, the banking sector remains heterogeneous. non - performing loans as a share of total loans outstanding, for instance, still vary significantly across countries. this is a legacy of the previous crisis, which we will need to keep a serious eye on to prevent new problems from emerging. the diverging resilience of households, firms, banks and governments implies that there is no onesize - fits - all policy advice as to how best preserve and restore the economy. in some cases, it might be possible to tap into the balance sheets of stronger sectors, to help the weaker ones. such withincountry solidarity can be welfare - enhancing but will not always be possible, or sufficient. moreover, we fout! onbekende naam voor documenteigenschap. need to carefully guard the stability of our financial system. no - one benefits when the coronavirus crisis evolves into a financial crisis. this implies that we need to be cautious with, for instance, proposals for large - scale debt forgiveness. such proposals are only viable when financed by governments. a pan - european policy response is needed to help the hardest - hit countries. recent policy announcements offer a step in the right direction, but this crisis is clearly not one that will be solved overnight. global economic challenges in the new normal beyond the recovery phase, the coronavirus might also change the behaviour of economic agents, affecting the structure of the global economy more fundamentally. one particularly relevant example concerns global supply chains. in today ’ s world very few companies produce their products from start to finish. instead, the production process is highly fragmented and takes place all over the world. this design of the global economy has enabled companies around the world to specialise and has created efficiency gains. the coronavirus, however, also shows how vulnerable the global economy has become due to firms ’ reliance on these highly fragmented global supply

##nated swaps and other eurodenominated transactions once the uk has formally exited the eu. these are just two of the most prominent examples of the regulatory uncertainty that is troubling the financial sector in the wake of the ukreferendum. further questions such as the free movement of labour, goods and services affect the uk economy as a whole and with it all the clients of banks. given that formal negotiations have not even started yet between the euand the uk, there are still plenty of plausible scenarios for their future relations, and thus for the environment banks will have to operate in. this uncertainty surrounding brexit will stay with the financial sector for some time to come, and there is no easy way around it. let ’ s move on to the second issue, which concerns regulation more generally. earlier this week, i was in santiago de chile to meet with my colleagues from the basel committee, where we discussed details for completing basel iii. the rules based on this regulatory regime are currently being finalised and phased in. important aspects of the current negotiations are the revisions made to the level and the calculation of capital requirements. the need to adapt to, and comply with these new requirements is imposing costs on banks and causing headaches among bank managers. this holds for european financial institutions in particular. in comparison to brazil, for example, the use of internal models for calculating riskweighted assets and thus capital requirements is widespread in europe. consequently, any changes to this approach – as currently discussed – have much stronger implications for european banks than for their counterparts elsewhere. it is therefore crucial that the final result of our current negotiations will be regionally balanced and does not undermine the risk - oriented approach of the basel framework. the committee was not able to reach such an agreement yet. we will continue our negotiations with the goal of ending regulatory uncertainty as soon as possible. and we will work towards finding a compromise before the committee ’ s oversight body – the group of governors and heads of supervision – will meet in january. 2 / 5 bis central bankers'speeches in parallel with reforming basel iii, in europe we have established the banking union with a whole new supervisory architecture at its core – the single supervisory mechanism. this supervisory mechanism is still relatively new territory for banks, as it has just recently celebrated its second anniversary. as you can see, the regulatory and supervisory world is changing significantly and rapidly for banks. keeping up with these developments is a challenging task. on top of that, we are currently