sabine lautenschlager : cyber resilience - a banking supervisor's view statement by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the single supervisory mechanism, at the high - level meeting on cyber resilience, frankfurt am main, 19 june 2017. * * * this week i learnt that the first computer virus dates back to 1971. it spread via the arpanet, which was a precursor of today ’ s internet. the arpanet connected about two dozen universities and government hosts in the united states. the virus had been written for experimental purposes and was not malicious. it just displayed a simple message on infected computers : “ i ’ m the creeper : catch me if you can ”. things are a bit more complex today, and the outcome of cyber incidents much worse : they can disrupt business, cost a lot of money and destroy reputations. and indeed, the potential for damage is great, as so much relies on it and so much happens online – the financial sector is a case in point. as you all know, banks have always been attractive targets for criminals. although the damage has been limited so far, we banking supervisors take cyber risk very seriously. and we insist on banks doing the same. cyber risk has been a priority for ecb banking supervision from day one. in 2015, we established a working group that had three goals. first, to get an overview of how supervisors deal with such risks both at national and international level. second, to get an overview of how prepared banks are for cyber risk. and third, to propose to the supervisory board a strategic direction and a dedicated work plan on cyber risk. we have learnt a lot over the past two years. and we have used it to address this risk from several different angles. for us, one of the first steps was to establish a cyber incident reporting framework. we conducted a successful pilot phase in 2016. and now we will implement a long - term solution for all those banks that we directly supervise. as from this summer, they will be required to report all significant cyber incidents. this will help us to assess more objectively how many incidents there are and how cyber threats evolve. it will also help us to identify vulnerabilities and common pitfalls. in addition to our ongoing supervision we also perform thematic reviews on cyber security and it outsourcing. these reviews help us to assess the risks

sustained growth and lower unemployment requires decisive measures for tackling existing market imperfections, in particular inflexible market structures, and the resolute continuation of the process of consolidating public finances, including the reform of social security systems. we do not get tired of repeating the message over and over again, as it is our firm conviction, that the future of europe will to a large extent depend on structural and fiscal policies within the member states, which must commit themselves to improving the conditions for further economic development and, in particular, employment developments. the high rate of structural unemployment remains the main challenge for economic policy in europe. although a faster pace of expansion of economic activity should foster net job creation, without structural reforms this will not be sufficient to bring about a significant reduction of unemployment. the structural nature of the problem in europe is evident from a comparison of the euro area labour market with that of the united states, and also from a comparison of the respective performances of the different countries within europe. structural reforms with a view to increasing flexibility in labour, product and services markets are the key to solving europe ’ s single most pressing economic problem. if undertaken promptly, such reforms would be the best way for the euro area to make the most of its potential for growth and employment. another main challenge for europe at the present juncture remains that of consolidating fiscal policy. several member states are not yet meeting the medium - term budgetary objectives of being in surplus or close to balance. this is the objective to which all governments in the european union have committed themselves through a stability and growth pact. the fiscal measures which are currently planned are often not ambitious enough, and only relatively modest reductions in structural deficits are envisaged. the improving economic environment will provide an opportunity to achieve sounder budgetary positions. this, in turn, will create the conditions for a more efficient conduct of fiscal policies and allow governments to face important challenges ahead, such as the ageing of populations. undoubtedly, this will in turn help to support non - inflationary growth and enhance the prospects for maintaining a stable social environment. the achievement of a scenario of higher growth and continued price stability is, in my opinion, the best contribution that the euro area can make to an orderly and balanced development of the world economy and of global financial markets. the ecb, as the single monetary authority in the euro area, hereby plays its part by focusing on its primary objective of maintaining price stability over the medium