act as contrarian investors in times of market stress. conclusions these works and debates matter not only in countries where the non - bank financial sector is large. in a globally interconnected financial system, countries with small non - bank financial sectors are often the most vulnerable to these risks. in light of the rapid expansion of asset management activities, the authorities need to be provided with instruments to prevent or mitigate consequent systemic risks, especially for situations where the measures available to asset managers alone would not be sufficient. managers of individual funds have a mandate to act in the best interests of their own investors and may not be in a position to act in the interest of financial stability. supervisors of individual funds may not have the information or means necessary to properly assess different funds ’ contribution to systemic risk. thus, a macroprudential approach to the supervision of non - bank financial intermediation should be developed. different authorities need to work together for a better understanding of the risk of fire sales, spillovers to other financial counterparties and disruptions in credit intermediation, and to design and test potential tools to prevent and mitigate systemic risk. designed and printed by the printing and publishing division of the bank of italy

. small and medium - sized institutions prove largely resilient to a simultaneous rise in the three types of risk. 2 / 4 bis central bankers'speeches thus the stress test scenario presents a mixed picture overall. on the whole, german banks and savings banks are robust and in good shape. but this should not blind us to the major challenges and the associated need for adjustments that banks face. elevated interest rate risk and the low level of risk provisioning increase vulnerability to shocks. i would therefore call on banks to focus their risk management operations primarily on the issues of maturity transformation and interest rate risk. 5. brexit will represent a challenge let me round out my remarks by discussing a challenge faced by all of us and which is having a particular impact on institutions. in all likelihood, the united kingdom will be leaving the european union on 29 march 2019. in that respect, no press conference on financial stability can avoid the topic of brexit. i will therefore address this topic in the remainder of my remarks. the negotiations ’ progress has tended to be on the sluggish side, creating considerable uncertainty for everyone : citizens, companies and not least the financial sector. in the 16 months that remain, the brexit - related restructuring has to be completed in order to ensure the uninterrupted continuation of customer relationships between economic areas. in this connection, i urgently advise all financial market participants to begin reorganising their operations as soon as possible, and to implement this process rigorously. this means, in particular, that all those banks seeking to continue to do business in germany or in other eu countries once the uk leaves the eu should, if they have not yet done so, file applications for licences as fast as possible. solutions also need to be found with regard to how existing contractual relationships will be continued seamlessly after brexit. for those institutions which change their contracts proactively hoping for their customers ’ tacit approval, legal risks could ensue, at least concerning retail customers. time will ultimately be the decisive factor. for the uk to achieve the smoothest possible exit from the eu, meticulous preparation by the banking industry is not the only thing that will be necessary. the preparations – or rather, the lack thereof – in the real sector give me cause for concern. companies should put their own access to financial services on a solid footing, and vulnerabilities that the uk leaving the eu will create for their own business models need to