by one person or a small group of individuals? including a bank ’ s behaviour and culture in broader supervisory governance assessments could possibly also involve assessing the management bodies ’ culture of learning. can they critically reflect on past experiences, produce a vision of what the culture ought to be, and be candid about what needs to change to achieve it? and how agile and resolute is the bank in actually changing the beliefs, structures, dynamics and thus behavioural patterns that are preventing it from reaching, or restoring, its reputational and strategic goals? conclusion let me conclude. some of you here today are non - executive directors at banks. as such, you play a vital role in setting the right tone for your entire institution. your conduct is crucial in creating a healthy risk culture within your organisation, and you are responsible for nurturing behaviour which reflects the core values of your organisation and protects its best interests, not just in the short - term, but also in the future. beyond your technical skills and your experience in banking, there are broader expectations regarding your conduct and behaviour as board members. you must ensure that there are concrete consequences for failing to adhere to prudent behaviour. governance in the stricter sense deals with the structure which shapes a banks ’ actions. getting these structures right is of the utmost importance. but that is not the whole story. it is also relevant how people behave within these more formal structures and what the underlying cultural drivers of their behaviours are. banks would be well advised to seek to identify these behavioural patterns and to act on them if such patterns encourage conduct which is not in line with their values and risk appetite. it would seem that the least that we as prudential supervisor can do is ask the pertinent questions and challenge banks to look beyond governance in the stricter, more standard sense. i have tried to identify the kind of questions we might ask. i am very much looking forward to hearing your views in the ensuing discussion, which i hope and trust will be lively and stimulating. i promise we will reflect seriously on any suggestions that you might have. thank you. 1. kirkpatrick, g. ( 2009 ), “ corporate governance lessons from the financial crisis ”, oecd journal : financial market trends, 2009 / 1 ( 1 ), pp. 61 - 87 ; saghi - zedek, n. and tarazi, a., ( 2015 ), “ excess control rights, financial crisis and bank profitability and risk

explain why. first of all, let me recall that over the past decade, the preparations for enlargement have already had a significant impact on the european economy, especially in terms of trade and financial integration between the new and the existing eu members. profound structural changes in the new member states in the past 15 years alongside with sub stantial progress towards the opening of markets early in the transition process ( mainly through the implementation of the so - called europe agreements ) have led to a tremendous increase in trade with the new member states. since 1995, the share of the current new member states in the eu - 15 exports and imports outside the eu ( so - called extra - eu exports and imports ) has increased by an impressive 50 % to more than 13 % and almost 12 %, respectively. likewise, impressive progress has been made during the past decade in terms of financial integration. substantial inflows of foreign direct investment ( fdi ), constituting by far the largest share of total cumulative net private capital inflows to the new member states, stand out in this respect and, in fact, fdi has been a key driver of productivity growth and export dynamics. especially after the russian crisis at the end of the 1990s, fdi flows from the eu - 15 to the new member states increased spectacularly and, according to the most recent data, the share of the current new member states in the eu - 15 ’ s total extra fdi outflows amounts to more than 12 %. the enlargement of the single market is beginning to strengthen the degree of competition as the accession of the new member states increases the number of suppliers within the single market. in addition, an enlarged single market is enhancing the scope for economies of scale. these effects should lower prices and increase productivity, thereby contributing to an increase in the potential growth rate. furthermore, the extension of the single market should increase the range and varieties of products available to producers and consumers. however, these clear benefits do not come automatically. to what extent and how quickly they can be reaped depends critically on whether macroeconomic conditions are stable and the extent to which structural reforms are implemented. from a central bank perspective, enlargement marks the beginning of a process which will lead to the integration of new member states in the euro area, as these countries have no opt - out clause. this integration is taking place in a well - defined institutional framework and comprises several stages. the first phase for the new member states is the