joachim nagel : how the banking union has transformed banks ’ it requirements keynote speech by dr joachim nagel, member of the executive board of the deutsche bundesbank, at the 20th handelsblatt annual conference on banking technology, frankfurt am main, 3 december 2014. * 1. * * opening remarks professor bott ladies and gentlemen it gives me great pleasure to address this handelsblatt annual conference today. “ all digital – all mobile – all compliant ”, the motto of this year ’ s annual conference on banking technology, points to the major challenges faced by the it departments of financial institutions. in my capacity as a member of the bundesbank ’ s executive board, i am responsible for the markets and information technology departments. so i am familiar with some of the problems and difficulties associated with a bank ’ s it infrastructure. on the one hand, the yardstick by which a bank ’ s chief information officer ( cio ) is measured is the way in which he or she supports the institution ’ s core business areas by delivering high - quality it services and products, which should ideally be standardised and streamlined. it security is coming increasingly into play here. on the other hand, he or she is also expected to demonstrate a high level of agility and innovative ability in the face of stiffer competition, including from enterprises outside the traditional banking sector. together with all other business units, then, it is important for banks ’ it to reap greater business benefits by implementing joint projects and employing innovative information technology. it is crucial that we recognise and harness the business relevance of trends in the field of information technology – trends such as mobility, as referred to in the conference ’ s motto. big data, “ datability ”, social media and cloud computing undoubtedly all open up additional major opportunities for banks. yet at the same time they pose new challenges, especially with respect to it security. today, i would like to shed some light on the third facet of this event ’ s motto – “ all compliant ” – with regard to the european banking union. the german corporate governance code defines “ compliance ” as adherence to legal provisions and corporate guidelines, which falls within the responsibility of senior management. 1 compliance therefore means adhering to and satisfying legal and regulatory requirements. the financial community is now confronted with many new and revised requirements and conditions, particularly as a result of regulation adopted in the course of the financial and sovereign debt crisis. banks need to demonstrate their “ regulatory compliance ” with

notes. fed liabilities are discussed more thoroughly in lorie logan, “ implementing monetary policy : perspective from the open market trading desk, ” remarks before the money marketeers of new york university, new york city, may 18, 2017. 16 it is worth noting that the size and structure of fed ’ s securities portfolio and the role the portfolio played have undergone substantial shifts at various times over the course of the fed ’ s history, reflecting changes in policy implementation imperatives. see meryam bukhari et al, “ the soma portfolio through time, ” federal reserve bank of new york liberty street economics ( blog ), august 12, 2013. 17 throughout this discussion, i focus on forward guidance and use of the central bank ’ s balance sheet ( through large - scale purchases of additional assets and reinvestment policies, but not funding for lending programs ) as possible tools. u. s. policymakers have shown little appetite to pursue negative nominal interest rates, although that is another unconventional tool used by several central banks in recent years. 18 see janet l. yellen, “ a challenging decade and a question for the future, ” herbert stein memorial lecture, national economists club, washington, d. c., october 20, 2017. in a recent set of simulations using traditional monetary policy strategies based on simple policy rules, federal reserve board economists estimate that the zero lower bound would bind with significantly higher frequencies than in previous analyses. see michael t. kiley and john m. roberts, “ monetary policy in a low interest rate world, ” brookings papers on economic activity conference drafts, washington, d. c., march 23 – 24, 2017. 19 she acknowledged, however, that the simulations on which her analysis was based could overstate the fomc ’ s current ability to respond to a recession, given little scope to cut the federal funds rate and the possibility that stimulus associated with forward guidance and asset purchases could be reduced with long - term rates already quite low. see janet l. yellen, “ the federal reserve ’ s monetary policy toolkit : past, present and future, ” opening remarks at the federal reserve bank of kansas city ’ s economic policy symposium, designing resilient monetary policy frameworks for the future, jackson hole, wyoming, august 26, 2016. 20 most participants did not indicate support for using the balance sheet as an active tool in other situations or for other purposes. see minutes of the federal open market committee, november 1 - 2,