andreas dombret : banking sector in uncertain times - a challenge for whom? keynote speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the british bankers association, annual international banking conference, london, 20 october 2016. * * * 1. introduction ladies and gentlemen we are facing a surplus of pressing issues at the moment, each so important and complex that i could easily devote an entire speech to every one of them. unfortunately, i cannot do that because my time is limited. but that is not actually a problem, because with so many different matters at hand, one can easily get lost in the details. therefore, before we start discussing the current issues in greater depth, i would first like to take a step back and look at the bigger picture. that is, i would not only like to put the challenges we are facing into perspective, but also reflect on the role i see for the stakeholders ; i. e. for banks, regulators and supervisors as well as politicians. 2. challenging times for the banking sector if we look at how the european banking sector has developed since the financial crisis, there has clearly been quite some improvement. compared to 2008, european banks have strengthened their tier 1 capital position by 6 percentage points to 15 % on average. their improved resilience is also reflected in the leverage ratio. before the financial crisis, european banks held around 3. 6 % of unweighted common equity ; today, the average is 5. 5 %. besides boosting their solvency, banks have also worked to enhance their liquidity buffers. yet over the course of the past year, european bank stocks have come under significant pressure. while the overall european stock market – as represented by the euro stoxx 50 – has more or less held steady, the euro stoxx banks index has dropped by more than 30 per cent. bank stock price volatility has soared, and cds quotes suggest that confidence has recently declined in the creditworthiness of many listed european banks. so something is obviously worrying investors. complex issues can rarely be pinned on just one root cause. indeed, banks in the uk and in the rest of europe are being pounded by multiple headwinds. let me briefly pick three of them. first, we are currently seeing significant structural changes in the market environment. two developments are decisive here. on the one hand, digitalisation is rapidly transforming the banking business. at the same time, banks and the

peter praet : japan and the eu in the global economy – challenges and opportunities speech by mr peter praet, member of the executive board of the european central bank, at the conference “ japan and the eu in the global economy – challenges and opportunities ”, organised by bruegel, the graduate school of economics, kobe university, and fondation france - japon de l ’ ehess, brussels, 7 october 2013. * * * i would like to thank stephan fahr, georgi krustev and ana lima for their contributions to this speech ; all views expressed remain mine. ladies and gentlemen, it is a pleasure to be able to share some thoughts on the challenges and opportunities japan and europe are facing in the global economy. since the beginning of the financial crisis, there has been no shortage of challenges along the road back to what i would call the “ normal functioning ” of our economies. one of the biggest challenges i see is still to be addressed : that of how to grow in an era of deleveraging. deleveraging can occur in an orderly fashion or it can be chaotic. it may drag our economies down or it can place them on a stronger footing. which of these will be the case depends to a large extent on how we manage the process. today, i will focus my comments on the policy challenges faced by our two economies, especially as regards how to manage the deleveraging process in the euro area, keeping in mind the japanese experience during the 1990s. as witnessed in japan, protracted and large - scale balance sheet adjustments can weaken economic activity over a protracted period of time. repairing the financial sector was an important element in improving the japanese economy. the lesson for the euro area appears to be clear : the overhaul of the financial architecture – including the establishment of a procedure for resolving failing banks – needs to be accomplished in its entirety ; selective mending will not be enough. in my view, we should make use of the momentum offered by the crisis to turn these challenges into opportunities – opportunities to put our economies on a sounder footing. to underscore why i think that we need to address today ’ s challenges in a comprehensive manner and why institutions are crucial in achieving this, i will first briefly review the build - up and adjustment of financial imbalances both in japan and in europe. then i will elaborate on how to manage the deleveraging process and the institutional changes to be implemented, before touching upon the role