policy in 2022 is about more than just policy interest rates : the balance sheet of the eurosystem will also be examined. to mitigate the risk of deflation or another financial crisis during the pandemic, the ecb purchased bonds on a broad scale and provided loans to banks under favourable conditions in recent years. with monetary policy being tightened, these instruments are also being adjusted. conditions for tltro loans were recently tightened, and in december we will discuss the scale - down of the bond portfolio that we plan to start next year. at the same time, the ecb can use the transmission protection instrument ( tpi ) to prevent disruption to the smooth transmission of its policies in the euro area. the ecb governing council can activate the tpi and temporarily resume bond purchases if it identifies disorderly market conditions while fiscal policy still meets all agreed conditions. there has thus far been no need to deploy the instrument. how does this affect dnb's balance sheet and profitability? monetary tightening will lead to expected losses for dnb ( as explained in my letter to the minister of finance on dnb's capital position, dated 9 september 2022 ). we will absorb losses by drawing on our buffers and our provision for financial risks. it is worth noting in this regard that central banks outside the euro area, even those with a different monetary strategy, are also expecting significant losses due to current market developments. dnb's loss should be seen in broader perspective. making a profit or loss is inherent to the conduct of our tasks as a central bank. the expected losses stem from monetary measures that have produced major public benefits. for example, our shareholder, the dutch state, benefited from savings on interest payments estimated at eur 28 billion between 2015 and 2021, which is significantly more than the profit distributions that are expected to fall by the wayside in the coming years. impact of rising interest rates on debts the effects of monetary tightening are visible in sharply higher bond yields and mortgage lending rates, which leads to higher financing rates for households and businesses. the relatively high level of household debt in the netherlands is a vulnerability. financial risks may materialise if outstanding debts need to be refinanced or if house prices fall. there are clear signs of a turnaround in the housing market. some cooling in the overheated market is desirable, but a fall in house prices could have negative macroeconomic effects as consumption declines. the financial position of homeowners is healthier

thomas m hoenig : back to the business of banking speech by mr thomas m hoenig, president of the federal reserve bank of kansas city, at the 29th annual monetary and trade conference, global interdependence center and drexel university lebow college of business, philadelphia, pennsylvania, 24 may 2011. * * * introduction today ’ s meeting and sessions are about financial reform, and i congratulate the organizers of this conference for keeping this important topic in the mainstream of discussion. much remains to be done around reform if we are to ensure a more stable financial system. topics today will focus on housing, the dodd - frank act, governmentsponsored enterprises ( gses ), the safety net and other reform efforts that necessarily follow the recent financial crisis that has so devastated our national economy. understandably, major financial interests are lobbying to change and mitigate the impact of dodd - frank or influence the reform efforts that will affect the gses. one reform effort, for example, that is especially difficult for some interests to accept is the volcker rule. this rule will restrict banking organizations from engaging in proprietary trading activities and involvement with hedge and private equity funds. it will affect the largest institutions most directly, confining their risk profile and limiting the advantages of leverage that currently drive behavior among these firms. how it is implemented will influence not only the behavior of these firms in the future but the discussion of other reform efforts yet to be undertaken. i strongly support the volcker rule and suggest it should be implemented with resolve and should be strengthened in its reach and impact. over the next few minutes, i want to outline my reasons for this position. supporting my remarks this morning is a more extensive white paper prepared with colleagues at the federal reserve bank of kansas city. this paper is posted on our bank ’ s website, www. kansascityfed. org. a brief history a fundamental characteristic of the united states is that its citizens have an enormous suspicion and distrust of concentrated power – political or financial. for nearly 200 years, state and federal laws placed limits on bank activities and resource concentration, resulting in a relatively open u. s. banking system that has served the country well. in fact, some of the largest institutions in this country started small : the bank of new york, for example, was founded, in part, by alexander hamilton, and the mellon bank was founded by a farm boy who built his own financial empire. thousands of banks, from small community