, transparency in all respects is necessary in order to make informed investment decisions. for example, the ecb welcomes the initiatives to create central counterparties for credit default swaps and expects to see concrete results. third, although business cycles are a common characteristic of market economies, public authorities should shape the economic order in ways that limit the probability and extent of future crises. in this context, regulatory and supervisory bodies have to ensure that their regulations and actions do not amplify business cycles. the current review of capital requirements in the financial sector is an important device for making risk measurement and management more effective and comprehensive. guidance concerning liquidity risk management has already been published. moreover, a debate on improvements in accounting rules is ongoing. in this respect, fair - value accounting rules should be changed to reduce a tendency to magnify boom - and - bust cycles. marking - to - market practices provide timely and relevant information on the state of financial firms under normal market conditions. yet, they may also trigger negative feedback effects when markets are disrupted, as financial institutions may be required to sell assets into falling markets, exacerbating the asset price decline. furthermore, accounting rules should support banks in building buffers during good times against future losses. see reinhart and rogoff ( 2008, 2009 ) for a comprehensive overview of financial crises and their impact on real gdp. responding to the financial crisis by supporting trust in the financial system, by preventing constraints on credit supply and by addressing the shortcomings in the financial system that i have just mentioned – these are our most immediate concerns. at the same time, we must not forget that the long - term prosperity of the european union does not only depend on a sound financial system. in order to increase europe ’ s long - term growth potential, to promote the creation of jobs and to increase the resilience of the economy to shocks, the implementation of the lisbon strategy for growth and jobs remains of key importance. in particular, investments in innovation, education, qualification of the labor force, and competive markets should become the focus of policies again. 4. conclusion let me summarise the main points : we are experiencing a severe financial crisis that has started to show substantial spillover effects to the real economy in the euro area. we have seen that european policy - makers have lived up to their responsibilities and acted in a swift and concerted manner. at the same time, we have to acknowledge that we are going through a phase of

more responsive to inflation pressures, particularly during periods of unusual and large supply shocks. so far, the bsp managed to anchor inflation expectations and thus, effectively control second - round effects. through our inflation - targeting framework, headline inflation has gone down to 3. 9 percent as of december 2023, from a high of 8. 7 percent in january 2023. second, we will strengthen the way we conduct systemic risk oversight. you saw what happened in march 2023 with silicon valley bank and credit suisse. we don't want this to happen to us. and for now, the banking system remains healthy, characterized by strong balance sheets, profitable operations, and sound performance indicators. the banking system likewise stood firm and proved its true resilience through the pandemic and through the international disruptions of march 2023. third, the bsp financial stability mandates also carry with it the responsibility to deepen our capital markets. this is meant to diversify the sources of funds in our financial system so that our businesses and our investments do not have to rely entirely on the banking system in case there is a credit crunch. fourth, we will strive to make the bsp sustainability initiative more meaningful by infusing it with an inclusion perspective. we want to ensure that the entire financial system supports an inclusive adaptation program so that the burden of transition does not fall on the most vulnerable segments of our society. parallel to this, the bsp is harnessing digital technology to empower sectors which have been traditionally underbanked. we think our open financial framework will unlock opportunities for consumers. 2 / 3 bis - central bankers'speeches the bsp has been relentless in bringing our paleng - qr ph plus program to various parts of the country, giving market vendors, public transport drivers, and other merchants a more convenient way of accepting e - payments for their transactions. conclusion so, the bsp has accomplished a lot in the last 75 years. none of these would have happened without the help of various stakeholders present here today. to the past members of the bsp monetary board and bsp officers, we salute you for helping shape the bsp into the world - class organization that it is today. meanwhile, i hope that through the initiatives which we will put into play in collaboration with the banking industry, the bsp will be able to contribute to a brighter and better future for our countrymen. to officially cap this evening, let me now call on my fellow monetary board members (