at the level of individual customers, which support decision making and carrying out the business in an optimal way. bis central bankers ’ speeches “ making the structure of universal banks clearer would simplify the governance of banks and improve risk management. ” i have some insights from practice on what the consequences of legal separation of business lines could be. in my view legal separation would benefit in particular the governance and risk management of banks. – as the hleg report states, i have also experienced that the cultures of traditional retail banking and investment banking / trading activities are very different and blended cultures can cause problems. – the nature of the business and the attitude towards risk - taking are different. in investment banking and trading activities profits are generated by actively seeking risk - taking opportunities by opening risky positions. whether these risk exposures had good risk - adjusted return prospects, has often been of secondary importance. models and warning signs flagged by risk management were often disregarded ; high risks were taken even if the probability of success was low and the potential downside was significant. in traditional retail banking, profits are mainly earned from interest rate margin income from long term customer relationships in a more stable manner. credit quality assessment and pricing policy lie at the core of the business. – also the time horizon differs markedly. in the trading activity the results settled and assessed every single day. in retail banking profits are generated over several years time period. – the responsibility and independence of the management is enhanced if business lines are separated to legal entities. – separation also facilitates management, risk management and hr / recruiting, as the objective and needs are clearer in a separately defined business unit. aligning incentives to the strategy of the business line by means of targets included in remuneration schemes will also be easier. – if the operations to be separated are logical units then it is most probable that required reporting systems to support governance are already in place. separation will also facilitate monitoring by external stakeholders thus improving market discipline, which can be seen as an extension to the internal corporate governance mechanisms. – specifically, separation may improve transparency and reduce uncertainty about the quality of banks as an investment opportunity thus facilitating pricing of the separated parts. this, on the other hand, would improve the access to market funding among above average quality banks moreover making the structure of universal banks clearer through separation of businesses also facilitates the task of supervisors and authorities responsible for resolution. – separation will certainly facilitate the application of recovery and resolution measures hence reducing the likelihood of public bail - outs, which would

’ s visions and values. this is the foundation of commitment. the challenge lies in the unexpected speed at which external changes can take place. these are always a challenge for management. however, if the staff does not believe that increased productivity will improve the company ’ s prospects and thus increase their job security, the commitment may not bee strong enough. this is why, in an environment of change, the securing of trust is critical. * * * that brings us to the public sector. the increasing competition forces companies to be innovative and to raise their productivity. but what about the public sector, which is often sheltered from actual competition? ageing creates its own challenges for the public sector. fewer people will be entering working life that will be entering retirement. prosperity and its continuing development will depend even more on productivity growth. for these very reasons – lack of competition and an ageing population – improvement of productivity in the public sector will pose a noteworthy challenge to our national economy. but it also presents an opportunity, because many public services are highly information - intensive. their digitalisation will enable robust productivity growth and the opportunity to provide better personalised services. finland has put much effort into measuring productivity in public services. this is not without its problems. how does one take into account the quality of services? how does one measure safety and security? productivity figures do not always tell the whole truth about the performance of public services. but the same productivity logic should also apply to the public sector. taxpayers'money should be put to ever better use. we should be able to either produce more services, or services of better quality, or preferably both. often in the public sector the organisational changes and restructuring of processes that are essential for productivity growth are cut down by resistance within the administration or become victim to internal turf battle. a breakthrough can occur only if leaders have a strong vision and persistence. productivity is not raised by it specialists, although their input is necessary. productivity starts to increase only when work and the related processes are reorganised. and this is something that leaders cannot delegate to anyone else. * * * in conclusion, future prosperity will be based on productivity growth. information and communication technology makes this growth possible, but restructuring within working and organisational processes, combined with personnel training, are equally necessary. and behind all this is the requirement of innovative management and the employees ’ commitment to their organisation. everyone must bear his or her own responsibility.