depositor protection, also considering the lower customer fidelity for the so distributed products ; this kind of deposits tends to be volatile and may rapidly decrease when the institution is perceived as weak. these conditions increase the need of a prompt intervention by supervision and resolution authorities as soon as the weaknesses of the bank appear as well as further analysis on the possible implication for crisis management regulation. in conclusion, identifying an adequate framework for managing the crisis of small and medium sized banks as well as for banks with innovative business model is crucial and particularly urgent at present time, also considering that this kind of bank could be those suffering the most from the pandemic. 4. conclusions the pandemic confirms and reinforces the perception of some ‘ traditional ’ risks and structural inefficiencies in the banking and financial sector. at the same time, the widespread use of digital solutions emphasizes the need to strengthen the supervisory approach and to review the regulatory framework to take into account the swift changes in the financial environment, also from a crisis management angle - point. cooperation is crucial to tackle the challenges ahead. 3 / 4 bis central bankers'speeches 4 / 4 bis central bankers'speeches

transitional agreements, and the mfn clause will be applied. the economic impact united kingdom – in the short term, the negative effects on the uk ’ s economy that many expected immediately after the referendum failed to materialize. gdp growth actually increased in the second half of 2016, rising from 1. 6 to 2. 4 per cent on an annual basis, and employment continued to rise. much depended on the strongly expansionary measures introduced by the bank of england in august and on a more accommodative fiscal policy stance. on 3 august 2016 the bank of england cut its bank rate by 25 basis points ; resumed the purchase of uk government bonds ; and launched new schemes for corporate bond purchase and for extending loans to commercial banks. the hm treasury put a brake on the fiscal consolidation process. analysts have progressively revised growth forecasts upwards for 2017, but continue to expect a slowdown over the year. according to the most recent consensus estimates, growth in the uk ’ s gdp is expected to average 1. 7 per cent over the year, slightly below that of 2016. the most significant effects of the referendum have been on the sterling exchange rate, which has depreciated by about 10 per cent since 23 june, both against the euro and in nominal effective terms ( that is, against all the other main currencies, weighted according to their trade with the uk ) ; inflation rose by nearly 2 percentage points, to 2. 3 per cent in march. the severe tensions besetting international financial markets around the time of the referendum dissipated quickly ( table 1 ). the economic policy uncertainty index rose in late june and early july, but then returned to pre - referendum levels ( figure 1 ). it cannot be ruled out that any tensions arising from negotiations with the eu may trigger new bouts of financial volatility over the next few years, especially if they coincide with renewed concerns on the markets as to the cohesion of the union. what may happen in the long term remains uncertain. openness to trade, immigration, and foreign investment generally promote growth, while a decrease in these factors, especially if it occurs in a climate of increasing protectionism at global level, could create significant costs for the uk economy in terms of innovative capacity, competitiveness, and productivity growth. this would also occur in the eu market, though on a more limited scale and would vary from country to country, depending on their links with the uk. the uk market is quite a small one for the eu