supervision, banks are now more alert to new risks that may lie around the corner. so, andrea – and everyone at european banking supervision – you can look back on a job well done. and i have great confidence that success will continue in the future. 1 enria, a. ( 2019 ), " the banking union – a personal view on its past, present and future ", speech at a dinner of the centre for european reform, london, 30 october. 2 emambakhsh, t. et al. ( 2023 ), " the road to paris : stress testing the transition towards a net - zero economy " occasional paper series, no 328, ecb, frankfurt am main. for a discussion of the effects of a delayed transition on potential output, see parker, m. ( 2023 ) " how climate change affects potential output ", economic bulletin, issue 6, ecb. 3 ecb banking supervision ( 2022 ), walking the talk : banks gearing up to manage risks from climate change and environmental degradation – results of the 2022 thematic review on climate - related and environmental risks, november. 4 jimenez, g., kuvshinov, d., peydro, j. - l. and richter, b. ( 2022 ), " monetary policy, inflation, and crises : new evidence from history and administrative data ", cepr discussion paper, no 17761, cepr press, paris and london. 5 ecb banking supervision ( 2021 ), supervisory priorities for 2022 - 24, december. 6 ecb ( 2023 ), unrealised losses in banks'bond portfolios measured at amortised cost, july. 4 / 4 bis - central bankers'speeches

christine lagarde : welcome address - fifth european central bank forum on banking supervision speech by ms christine lagarde, president of the european central bank, at the 5th european central bank forum on banking supervision " europe : banking on resilience ", frankfurt am main, 30 november 2023. * * * it is a pleasure to welcome you to the fifth ecb forum on banking supervision. ten years ago, on 15 october 2013, the eu council approved the regulation launching the single supervisory mechanism. it was the most significant step in european integration since the introduction of the euro. and there were two main reasons for taking it. first, it would lead to stricter and more uniform supervision – a single supervisor enforcing a single set of rules for a single banking market. that would, in turn, make it possible to establish a true banking union, with a common safety net. and a banking union would strengthen the monetary union by ensuring that bank deposits were seen as equally safe everywhere. as andrea enria eloquently put it, " only unified supervision and an integrated safety net can make sure that one euro has the same value and is afforded the same protection regardless of the member state in which it is deposited ". 1 second, single supervision would help make monetary policy more effective, because a weak banking system can complicate our task of stabilising inflation – in both directions. when central banks are easing policy, a fragile financial sector can impede the transmission of lower rates to the economy, especially if banks are unable to lend. we saw this after the euro crisis when banks were deleveraging as the ecb was cutting rates. at the same time, weak banks can also interfere with rate hikes. if monetary policy gives disproportionate weight to financial stability risks, it might tighten less than it ought to. setting up a single supervisor was a necessary condition to achieve both these goals. but, of course, there was no guarantee of success. it had to be tested by events and shaped by leadership – notably that of andrea and his predecessor, daniele nouy. in my remarks today, i will explain how european banking supervision has brought about key improvements to the supervisory landscape and to the effectiveness of monetary policy. the benefits of single supervision for the banking sector 1 / 4 bis - central bankers'speeches three improvements to the supervisory landscape stand out. first, european banking supervision has led to sounder banks, thanks to supervisors enforcing tougher regulatory standards