in europe but we still face important challenges ahead. i want to stress two of them. the single resolution mechanism, the second pillar of the banking union, has just successfully passed its first real test this summer with the orderly resolution of banco popular. however, there is still room for improvement in the coordination between the numerous institutions and authorities involved in these procedures. it means that every participant must know and very clearly understand its role in the process to ensure an efficient resolution. second, europe still suffers from overcapacity and cross - border consolidation is needed. in the united states, the top five banks have a market share of more than 40 % while this figure is barely 20 % in europe. given the new regulatory and supervisory framework i described earlier, we believe that the banking union should be considered – according to the criteria set up by the bcsb – as a single geographic area. furthermore, we are reaching the point in europe where facilitating healthy and well - designed cross - border mergers could actually improve financial stability. it would make banks better able to diversify their risks, achieve economies of scale and become more efficient. and as we have strengthened the single supervision and resolution of significant institutions, we should not fear the “ too - big - to - fail ” issue. cross border consolidation would foster a more efficient allocation of savings towards productive investments in europe and it would place european banks in a better position in terms of international competition. to conclude, interactions between policy makers, researchers and practitioners are very valuable and i am certain that this conference will contribute to fuelling these interactions. we strongly believe in the positive spillovers from the research function being closely intertwined with the supervisory and financial stability divisions. in particular, empirical evaluations and theoretical works on policy design – and we will see some of them presented today – are absolutely necessary in order to fine tune and reinforce the regulatory reforms that have been implemented not only in europe but worldwide. i wish you a very fruitful conference and i will give the floor right away to henri fraisse, who will chair the first session. thank you for your attention. 1 claessens, stijn and van horen, neeltje ( 2014 ), “ the impact of the global financial crisis on banking globalization ”, imf working paper 14 / 197. their data set covers 138 host countries for the period 1995 – 2013. 2 focarelli, dario and pozzolo, alberto ( 2005 ), “ where do banks expand abroad? an

monetary policy. 2. macro financial risks and outlook in this context marked by the rise in external shocks, strong uncertainty about the extent of their impact and their duration, and a change in the interest rate environment with the prospect of very low or even negative rates over a long period coming to an end, we can collectively rejoice in the fact that for more than two years the banking sector has been resilient ; it has contributed to mitigating shocks and not to amplifying them. this shock absorption capacity is an asset that must be maintained and even strengthened. this can be done through two channels : supervision and regulation. the macroeconomic risks and outlook in particular confirm the need to keep the monitoring of banks'credit and market risks high on the supervisory agenda of the acpr and the single supervisory mechanism ( ssm ). the immediate impact of the war in ukraine on financial stability has so far been adequately absorbed as the direct exposures of the financial sector to russia were low. however, risks to banks and financial stability may materialise through second - round effects and indirect channels from pre - existing vulnerabilities, notably those associated with ( i ) sectors most dependent on energy commodities, ( ii ) the development of leveraged finance and ( iii ) exposure to cyber - attacks. in this respect, particular attention should be paid to potentially sharp revaluations of high risk asset prices. the same holds true for rising prices and volatility in commodity markets and the considerable increase in margin calls on derivatives, in particular for energy and agricultural products. these have already put pressure on the liquidity of commodity market participants. very careful monitoring of credit and liquidity risks in the energy commodities sector is therefore required, in particular to ensure that any potential default ( e. g. by a trader ) remains contained and does not lead to systemic contagion. our second instrument for maintaining and strengthening banks'shock absorption capacity, after supervision, is regulation. i would like once again to stress the importance of an effective, fair and final implementation of the basel iii accord, in its final 2017 version. as i said it last year, quoting the governor, and it is even more the case today in the light of the crises we are facing : the basel iii rules represent the best possible agreement to promote financial stability at the international level. the european commission's proposal ( crr3 / crd6 ) to finalise the implementation of these rules is a decisive and very balanced step