more efficient for market participants. by enhancing a stable infrastructure and enabling pan - european harmonisation in the settlement of payments and securities, we supply a core component for the provision of innovative products and services at the domestic euro area level. and we also support the aims of the capital markets union. impetus for the development of standardised pan - european instant payment solutions with psd2, the sepa instant credit transfer scheme and tips, the retail payments market in europe has the building blocks it needs to provide innovative pan - european payment services. however, adopting the instant credit transfer scheme and connecting to tips as a passive participant or reachable party so that customers may receive instant payments is just a preliminary step. it is also not enough just to provide the core sepa instant credit transfer as a faster alternative to the sepa credit transfer. providers also need to tap into the potential of growing payment volumes, both at physical points of sale / points of interaction in shops and in e - commerce and they need to offer domestic pan - european solutions that are safe, efficient and easy to use. 2 / 3 bis central bankers'speeches what we are seeing is that global providers are successfully tapping into this potential, using the pan - european sepa schemes – or cards – as the basis for end - user solutions that appeal to customers. there is nothing wrong with that – as long as our regulatory requirements are respected and there is competition and diversity in the payments market. but will there be sufficient competition and diversity in the european payments market in the long run if we continue as we are doing now? what is the biggest challenge for payment service providers in europe? is it the harmonisation and integration measures introduced by central banks and regulators, or is it global competition? might it not be more future - oriented to aim to deliver strong and resilient domestic european payment services in general and truly pan - european instant payment solutions in particular, rather than defending national legacies or creating new regional or group - specific solutions? conclusion the eurosystem wholeheartedly supports the creation of an innovative single payments market for the euro through its market infrastructure projects and policy work. we invite actors in the payment service industry to work with us on a future - oriented approach to pan - european innovative retail payment solutions. this will enable us to safeguard a competitive and diversified payments market – for the benefit not only of generation z, but of all individuals and businesses making euro payments across europe. i wish you a fruitful discussion and an enjoyable conference

investment vehicles, and how much risk will eventually flow back onto the balance sheets of banks. moreover, until conditions in the us housing market show signs of improvement, the possibility of further tensions surfacing in structured credit markets cannot be excluded, especially if credit quality were to deteriorate in the broader us mortgage market. as the adjustment process in the financial sector over the coming months is likely to prove challenging, the financial system could be more vulnerable than before to the crystallisation of other risks that have been identified in previous issues of the fsr and which remain relevant. specifically, these risks are related to the following facts and developments : first, within the euro area, the substantial increase in household sector indebtedness together with signs of vulnerability in some housing markets adds to the credit risk facing euro area banks in the short to medium term. second, the surge of leverage in parts of the corporate sector, especially that associated with lbo activity, raises the possibility of an adverse turn in the credit cycle involving a rise in the default rates of the most heavily indebted firms. third, although so far the hedge fund sector was relatively unaffected by the recent market turmoil, some uncertainties remain regarding hedge funds ’ exposures to credit markets, as well as their leverage and liquidity risk. finally, outside the euro area, persistently wide global imbalances continue to pose a risk that they will be unwound in a disorderly manner. this could bring about further tensions in global capital markets and, if this risk were to materialise, it could pose a challenging test for the risk management and loss - absorption capacities of key financial institutions. all in all, the risks to euro area financial system stability have materially increased over the past 6 months. there are, however, several mitigating factors : the economic outlook remains broadly favourable and, although pockets of vulnerability can be identified, the balance sheets of households and firms are largely in good shape, supporting the overall creditworthiness of the non - financial sector. moreover, the capital positions of core financial firms are also generally sound. this overall positive assessment of shock - absorbing capacity should not provide any grounds for complacency given the heightened uncertainties. in an environment where balance sheet conditions could unexpectedly change, vigilance is of the essence and financial institutions in particular should step up their efforts to effectively manage the risks that may lie ahead. in this respect, recently launched initiatives and measures that are being taken, both by policy