0 ) 69 9566 3077 presse @ bundesbank. de, www. bundesbank. de reproduction permitted only if source is stated. ing risk sharing via financial markets – particularly with regard to international risk sharing. better risk sharing does not imply calling the european bank - based financial system into question. rather, it is about finding a good mix between debt and equity finance, between financing via banks and markets. this contributes to an improved allocation of risks across the financial system and to its resilience. this is because profits of corporate firms or of banks automatically accrue to the owners of these firms who, in turn, also bear potential losses. claims of creditors, by contrast, do not depend on the economic success of a firm, and they bear losses only if the firm in question becomes insolvent. equity capital can, in addition, make a special contribution to the financing of young and innovative firms. despite all the differences between the german and the french financial systems, markets for venture capital remain underdeveloped in both countries, as they are in other parts of europe. which specific measures can enhance the contribution of financial markets to growth, innovation, and stability? the capital markets union – a project which was launched about two years ago – provides answers to this question. reforming insolvency legislation and – where relevant – harmonizing rules can contribute to cross - border investments and to dealing with non - performing loans. minimum harmonization in terms of the collection of collateral and in terms of creditor rights can be useful in this regard, particularly as it would make shifting losses ex post more difficult. moreover, the capital markets union can contribute to relaxing financial constraints so that strong small and medium - sized enterprises and start - ups obtain access to finance. international investment can be attracted by harmonizing investor protection legislation within the eu and removing barriers to cross - border mergers and acquisitions. central banks in europe have been supportive of the capital markets union project, as it can contribute to growth while, at the same time, enhancing the resilience and stability of the financial system. seite 7 von 10 deutsche bundesbank, directorate general communications wilhelm - epstein - strasse 14, 60431 frankfurt am main, germany, tel : + 49 ( 0 ) 69 9566 3511 or 3512, fax : + 49 ( 0 ) 69 9566 3077 presse @ bundesbank. de, www. bundesbank. de reproduction permitted only

. global supply chain is undergoing significant shifts ; companies and various authorities have to be nimble enough to capitalise on these opportunities. automation and robotics will threaten lowskilled workers and those in the contact intensive sectors. the shift to online have also created new opportunities and challenges for employment - intensive sectors like travel, hotels, restaurants and recreation. some of these changes are going to stay beyond the pandemic. these structural changes need to be kept in mind while formulating strategies for participative growth process. 6. at another level, the pandemic has affected the poor and vulnerable more, especially in emerging and developing economies. daily wage earners, service and informal sector workers were badly hit. their employment and income opportunities were curtailed. the lasting damage inflicted by the pandemic on these segments is of serious concern for inclusive growth. in the medium to long - run, both efficiency and equity will greatly matter for sustainable growth and macroeconomic performance. 7. technology adoption which was earlier limited to core sectors has now permeated to several 1 / 5 bis central bankers'speeches other areas, viz. education, health, entertainment, retail trade and offices. the pandemic has also caused disruptions and induced reallocation of labour and capital within and across sectors. the firms which were quick to adopt technology and were flexible in working from off - site are attracting more capital and labour. on the other hand, firms which were not up for the challenge and competition will have to leave the space for the more dynamic ones. these forces of ‘ creative destruction ’ are expected to boost productivity by encouraging greater competition, dynamism and innovation in several sectors of the economy. the indian scenario 8. let me now turn to the indian scenario. in the post - pandemic world, india ’ s prospects are underpinned by several dynamic sectors. i wish to briefly touch upon some of them. 9. first, information technology ( it ) services and information technology - enabled services ( ites ) backed by entrepreneurial capabilities and innovative solutions have emerged as key strength of the indian economy over the years. there is a growing league of unicorns in india reflecting its potential for technology - led growth. the country has added several unicorns over the last year to become the third largest start up ecosystem in the world. underpenetrated indian markets and large it talent pool provide an unprecedented growth opportunity for new age firms. further, the covid pandemic has provided a