balances mainly reflects the lower - than - anticipated economic growth, it is worrying to see that not all countries with severe imbalances have so far introduced sufficient consolidation measures. it is fundamental that the credibility of the institutional underpinnings of emu be maintained. in this respect, let me stress that the treaty and the stability and growth pact provide an appropriate framework for maintaining fiscal discipline within adequate bounds of flexibility. far from being a mechanical scheme to constrain fiscal policies, the excessive deficit procedure establishes a sequence of incentives for countries to prevent and correct severe budgetary imbalances. at each instance of this sequence, a country ’ s fiscal efforts and changes in the economic environment are assessed and taken into account in the design of further steps. countries are therefore continuously made aware of the risks and costs arising from any delay in taking policy action to preserve the sustainability of public finances. to maintain the credibility of the fiscal policy framework it is essential to fully abide by its rules and to implement them in every respect. doing so and complying with the requirements of the ecofin council will lead to positive confidence and growth effects, which can be strengthened if fiscal plans are part of a comprehensive and credible medium - term strategy with emphasis on structural expenditure reform. finally, although it might mean stating the obvious here in lisbon, the lisbon strategy, which was agreed upon back in march 2000, is of the utmost importance in the process of implementing structural reforms. more reforms are urgently needed to reduce structural rigidities in labour and goods markets so as to address the main economic problem of the euro area, namely the high level of structural unemployment. at the same time, current efforts to set in motion important changes in pension and health systems and in other areas in order to prepare for the ageing of society are of immense significance in ensuring the sustainability of our social security systems. let me close with a few personal remarks. as you are aware, this will most probably be the last press conference following a meeting of the governing council that i will chair. from my perspective, these press conferences have been a success. their purpose is to inform the media and the general public in detail, and on an almost “ real - time ” basis, about the outcome of governing council meetings. they have allowed us to communicate and clarify our policy decisions in an open and transparent manner. indeed, in my view, this practice makes the ecb one of the most transparent central banks in the world. i would like to take this

carlos da silva costa : regulatory and supervisory institutional frameworks in europe opening remarks by mr carlos da silva costa, governor of the bank of portugal, at the seventh bank of portugal conference on financial intermediation, lisbon, 7 july 2017. * * * it is my great pleasure to welcome you to the 7th banco de portugal conference on financial intermediation. this conference series has taken place every other year since 2005 ( when it was called the “ conference on financial fragility and bank regulation ” ). it aims to bring together senior and young researchers from academia and central banks to discuss the most recent developments in financial intermediation, markets and regulation. back in 2005, awareness of the challenges ahead in terms of financial stability was already increasing. some key topics were becoming important in the theoretical and policy debate : rapid financial innovation in a context of international integration ; liquidity management practice and the associated systemic risk ; the role of central banks as lenders of last resort ; and the set of problems related to “ too big to fail ” financial conglomerates. when the international financial crisis began, followed by the european sovereign debt crisis and the vicious circle linking sovereigns and banks in several countries, these issues became a focal point. many new topics also joined the research agenda, such as : the misuse of the so - called originate - to - distribute model, in particular resorting to complex derivatives and other opaque products ; the pro - cyclical nature of the existing capital regulation framework ; the adequacy of financial regulation and supervision frameworks. banks were forced to adapt their business models and management strategies. in particular, the very low interest rate environment and the unconventional monetary policies conducted by the main central banks dramatically changed the operating environment and the incentives for banks and markets. at present, there are four key issues that in my opinion deserve the attention of policymakers and researchers : 1. the regulatory and supervisory framework an economy ’ s regulatory framework reflects society ’ s preferences in terms of risk protection. these preferences evolve over time and in tandem with them the supervisory regulatory framework. in the aftermath of the recent crisis, the public asked for stricter financial and supervisory regulations. this led to a significant change in financial regulation, guided by two main concerns : improving financial institutions ’ governance models ; reducing their degree of risk and creating capital buffers to absorb risk, should it materialise. 1 / 3 bis central bankers'speeches but more recently the idea that we have reached a point of overregul