 OK, good afternoon. Let me say, please, I haven't had the invitation to speak to this event this afternoon. Let me, by the way, before I dive into my remarks, make the link to what we just heard. So I'm going to go much more to the short-term dimension of macro-dental policy. But there is a link, which is if, well, we know the history of the last 10 years, which is that one reason maybe why all of the action on, say, climate change has been delayed was dealing with the crisis. And of course, if you have a financial crisis, everything else is put on hold. So I give a speech during the summer, basically making this point, you have to have a short-term stability in order of the oxygen and the space to tackle long-term issues, whether it's climate change or the implications of aging for the financial system. So that's my bridge between that session and what I want to talk about. I think, again, before I get going on the two points I want to make, the fact that currently I'm the chair of the advisory technical committee of the ESRB means I get to see a lot of the work in progress across the system. And previously, before I took on my current job, I was chair of the advisory scientific committee. So the ESRB means a lot to me. And let me emphasize this is when we think about this, who does all the work behind what you see in the website? It's the secretariat. It's the staff of the ECB, the staff of the various national competent authorities, the staff of the European supervisory authorities, and the commission. When I chaired the task force on safe assets, last year, again, if you go to that, you just see what's possible when so many people, so many institutions can come together. But today, I want to focus on two points. One is, what is the role of macro-potential policy in an upswing? So we know now in Europe, we're solidly in a phase of economic expansion. And the question is, how should the stance of macro-potential policy respond? And then second, a bit similar to President Draghi's point earlier on, we know now that with the more and more of the assets of the financial system intermediated through non-banks, how do we think about macro-potential policy? How do we think about monitoring financial stability vis-a-vis the non-bank financial system? So if I think about the first question, which is the upswing in the financial cycle, well, this is really in many ways the time has come for the ESRB. That one reason why the ESRB was set up was the recognition that at the last crisis, and indeed many historical crises, have been driven by excessive leverage during the upcycle. So when you have excessive leverage, there's increased vulnerability to negative shocks. And if such a shock occurs, it also makes it more difficult, more costly to resolve a crisis. You get more persistent downturns and a lot of difficult costs associated. So we know that's, I think, the consensus for you of the crisis we've had. If you go back to Levin Valencia, Reinhardt Rogoff, Shuler R. Conteylor, it's really an age-old story. And again, if you people who look at the mid-2000s and they say, well, the counterfactual, what if we had the toolbox we have now and we had that toolbox and it was used in the mid-2000s? Let me cite two papers. One is the American Economic Review paper by Philippe Martin and Thomas Philippon, which came out last year. And that's a very nice paper about the euro area, about individual countries in the euro area. And they're basically able to do a very nice empirical study where if limits on leverage have been imposed, the scale of the boom and bust cycle would have been much milder. The costs would have been a lot less. Equally, there's a recent Bank of England paper which shows that, again, if we had limited leverage of both the financial system and of households in the mid-2000s, the crisis could either have been avoided or mitigated. So I think we now have a very solid evidence that the alternative to having macroprudential policy, we've tried that. So maybe let's try this time to actually use it. So President Draghi mentioned earlier on that more and more countries are turning on different measures. So the counter-scriptical capital buffer is being turned on in different countries. We turned it on this summer. Of course, with a one-year lead time, you announce now it takes effect one year from now. And across all of the countries associated with the ESRB, 20 countries have also introduced borrower-based measures. And I'll come back to the link between those measures and the cycle in a couple of minutes. Now, the logic of the counter-scriptical capital buffer is straightforward. If an additional capital buffer is imposed during upswings, then this should make the banking system more resilient in a future downturn because that capital buffer can be switched off. The extra capital accumulated during the upswing can be released, and therefore the kind of pro-scriptical, deepening the recession type of withdrawal of credit supply that some banks engaged in to preserve capital in a crisis that can be avoided. So it's really a resilience issue in that when the sun is shining, prepare for the rainy day. Now, one basic point here, and this has motivated us in how we decided to switch this on, is this should be done early. Because if you wait too long, especially when there's a one-year lead time, you may be too late. So in assessing the timing, how much evidence do you need to accumulate? How many cyclical indicators need to be flashing at you? Our assessment, and I cite in the written speech, which is on the Central Bank website, I cite the work we've put into that to show that the benefits are high of an early switch on, and the costs are fairly limited. So I think that's an important point, because all these countries are trying to work out how to use this instrument. And I think an early switch on, I'm convinced by that. Second, in calibration, so you've decided to switch it on, then the question is to calibrate. How, what size of buffer should you look for? And so here I think the natural way to think about this is to think about, well, how quickly will capital deplete in a downturn? In order to keep the banking system safe and resilient, what kind of buffer is needed to deal with the cyclical risk? And of course, there's a close connection with how we think about stress tests in thinking about that. But let me point out two factors that are relevant in that discussion. One is, I think it's inescapable that a country with a high stock of non-performing loans is intrinsically more exposed to cyclical risk. I mean, just, you know, we all believe that the recent improvement in macroeconomic conditions has been a pretty dominant factor in the decline in non-performing loans across Europe in the last couple of years. So if that's true, I think it's obviously true, then what is true is if we had a cyclical reversal, if we had a downturn, then some of those non-performing loans which look better, may no longer look better, may start to not perform again, because essentially in a downturn, if people lose their jobs, if businesses lose sales revenue and so on, it's more difficult for a data to maintain compliance with the terms of a loan contract or to comply with the terms of a restructure. So especially if there's inadequate provisions for the NPLs, I think there's a pretty direct connection between the stock of NPLs and the optimal value of the CCYB. You need to build a bigger cyclical buffer if you have a large stock of unresolved NPLs. The second point I want to make is that there's not really a clean division between cyclical risk and structural risk. So there was a recent ESRB studied earlier this year about structural buffers and part of that has a discussion about the interaction with the cycle. And I think one particular example is, imagine you have a systemic risk buffer, a structural buffer which is really to capture overexposure to real estate. Now, you can imagine a real estate crash independent of the business cycle. It could happen for exogenous reasons. Under the hand, it's difficult to imagine a general recession which does not generate losses on real estate loans. So I think that's an example where there's going to be a clear cyclical element. So if a country has imposed a systemic risk buffer, even though the theological reasons are structural there, it does, in fact, provide some cyclical protection as well. So if a country has essentially is delivering cyclical protection to other types of buffers, then the correct calibration of the CCYB would be less. So I think the holistic assessment of how much cyclical protection is in the system, no matter what the label on the buffer is, I think it's quite important. And as I say, in advertising the work of the ESRB, the structural buffer report earlier this year goes into a lot more detail and gives a lot more examples. Now, if I turn to borrower-based measures, again, these might be thought of as structural or steady-state measures. But I think if you look at the history of how the distributions of loan-to-income ratios, loan-to-value ratios, debt-service-to-income ratios and so on move over the cycle, it's clear I think that under cyclically strong conditions, there's typically a reassessment both by banks and by households that essentially the future looks bright and what might be deemed a risky ratio certainly is now deemed as okay. So in the absence of ceilings, in the absence of limits, I think the distribution becomes more right-tailed for these ratios. And so if we now have a system where more countries have these ceilings in place, then the cyclical drift in these ratios may be less severe in the future. And again, if you believe you've limited the boomer cycle because of those fixed ratios, then I think you're gonna have a lower amplitude of the cycle. And again, a lower amplitude of the cycle, by the way, will feed into the calibration of the CCYB. Let me finally just on this cyclical issue talk about fiscal policy because in parallel, typically when we try and advise, how do we manage the risks associated with the cycle? Typically, we advocate counter-cyclical fiscal policies, whether that's simply just letting the automatic stabilizers work or even possibly also having activists counter-cyclical measures. But if we have those in place, then again, we might calculate that the amplitude of the boomer cycle is less and therefore the amount of protection we need from the macro-prudential buffers is less. Conversely, if those policies are not in place, if fiscal policy is moving in a pro-cyclical way, then that may require a greater offset with macro-prudential policy. So that's an interesting interaction to think about. Okay, let me move to the second point I want to make, which is about market-based finance and financial stability. And again, a couple of weeks ago, we had the publication of the latest EU shadow banking monitor by the ESRB. I think some of the numbers were cited by President Draghi earlier on, but when you have a universe which corresponds to about 40% of EU total financial assets, this is a large part of the European financial system. And I think the ESRB can play a unique role here in terms of coordinating national efforts to track developments in market-based finance. So I mentioned earlier on, the ESRB is really a coalition of the willing across the different member states. And especially when a lot of the regulation here is national, a lot of the data collection is national here. It requires good citizenship, especially by contributing a lot of market-based finance to contribute. Now, why should we care? There's really two. One is the scenario where the next crisis comes from Iran in the market-based sector. So Iran on investment funds, where if they have illiquid assets and illiquid liabilities, we could have a problem. And then second is whether it's independent or interacts with that basic factor is the banking system relies on the non-banks. About 8% of bank assets are invested in these entities and they rely on this sector for about 2.2 trillion in funding. So a problem in the non-bank financial sector quickly will spill over to the banking sector. And we know what happens then. So let me also point out that more and more, we're also aware that there's a link between the non-bank financial sector and the real economy. So one thing we're noticing is the increasing importance of non-banks as credit providers to non-financial corporates and to households as investors in commercial real estate and in residential real estate. So if you're trying to understand the housing market now, it's not enough to think about bank-provided credit. The credit and the other types of funding coming from non-bank intermediaries is increasingly important in some countries. So I think in turn, what does that mean? It means just as we absolutely insist we need to have a good understanding of the leverage, the liquidity, the maturity profiles of banks. Equally, we need to have corresponding information for non-bank intermediaries who are providing funding to the real economy. Progress here is, I suppose, a differentiated according to what slice of that you're looking at. So President Draghi earlier on was highlighting the progress we've made at ESRB and EU level vis-a-vis derivatives data and the tsunami of data that's coming through there. So of course, at EU-wide level, it's really important to understand whether these markets are being used to hedge risk, to be risk reduction and risk transfer to those who can absorb it or being used to have synthetic leverage in an inappropriate way. But in addition to that, at national level, especially countries with our international financial centres, including my own jurisdiction, it's very important to provide and publish information on those sectors. So let me mention a couple of studies that we're doing at the central bank. So in the shadow banking monitor, there's a box which looks into the international linkages of Irish domiciled non-securitisation special-purpose entities. So this is an area where we have under legislation, we can gather information. We don't regulate these entities, but we can gather information on these entities and it proves to be a treasure trove of understanding how the international financial system works. By and large, these entities are irrelevant for the Irish economy, but they are providing links from certain countries of origin to certain destinations. And I think there's a lot to be learnt there. So that box in the monitor will give you quite a bit of information. And then the second example from the monitor is this study of a credit of all these CDSs by USID funds. So this is a joint work between the Irish Central Bank and staff from various ESRB member institutions. So, by the way, in the Bank of France's Financial Disability Report this spring, myself and Kitty Maloney, the head of market-based finance at the bank, we wrote an introduction or overview of this sector in the Irish economy. And again, we have no local financial disability reason to do so. All of this is as a platform, as a host for international activity, but as an international public good, those countries with big sectors, whether it's us or the other big financial sectors in Europe, should be providing what we can. So let me also, and I think one of the strengths of the ESRB is its links to the academic community through the scientific committee, the ASC. But more generally, the more the opportunities there are for researchers to help in the analysis of all the data we collect, the better. So again, President Draghi already mentioned the Bridge Program for Data Science, the joint ECB ESRB program. And this really, in terms of advertising to researchers out there, provides a great opportunity, which is I think a win-win, provides a new data for academics with a lot of direct policy relevance. So let me conclude there that really, the two points I'm making now is, I think the whole rationality of the ESRB was really to avoid what happened before, which is inadequate use of macroprudential policies during upswings. We have an upswing now, so let's use the instruments that have been made available to us. And then second is, the reality is so much of finance has moved away from banks to non-banks that we just have to move forward. It's moved forward in terms of understanding through data analysis and then moved forward with the agenda about working out what kind of policy instruments are appropriate for that sector. So let me stop there. And I kind of, I think, allowed some time for Q&A, so I'm happy to take any comments or questions. And then who has the microphone? Front row. Thank you, Phil, it was really a very nice overview. And when you started, you said, okay, we have these buffers, so we have resilience, so in bad times we can use it to draw down, a bit like with Egypt. You have the seven years of extra wheat, and then you use it for the bad years. Could it also play a role for slowing down the upswing? Yeah, so that's an interesting point. I think the safe way to phrase that is you might think so, but the reality is what's happening in some markets now is, for example, credit might be restricted, but as I've just mentioned, there are non-bank actors in certain markets. So I think it'd be over-promising to say, not only are we providing, as you say, the buffers for the next downturn, but we're actually trying to affect the current dynamics. I mean, I think a lot of time it will have an effect, but I think we're better off not relying upon that, because in a market where there are some entities where they're under the constraints, other entities that are not, I don't think it's a guaranteed that you can necessarily influence current dynamics. So we would not claim we're trying to target the level of house prices or target other current indicators. It's more to build the resilience for the downturn. Behind. Daniel? Banks, presumably, are more robust, more resilient, but risks have been migrating towards the non-banking sector, shadow banking. Now, macro-potential policies also ask to deal with systemic risk in shadow banking. But apart from macro-potential policy, now there is a land of last resort function, which in highly critical times should play a role in dealing with a banking crisis. But what about non-banks? If non-banks are huge and operate as big lenders, if something goes terribly wrong with a huge non-bank, or a CCP, for example, I mean, who's going to perform the land of last resort function? A central bank, the ECB again? Okay, I think that's a very deep question. And some of the issues that's raised there is entities versus activities. So clearly, is it the case that you're looking, with a bank you may want to save a bank because it plays a certain role in the society. Whether you want to save an asset manager or some other entity is a different question. But I mean, there's no doubt, typically, any central bank, any monetary system, in terms of the mechanics of having the stability of the currency and so on, typically liquidity policies are expressed in a generic way. It's not exclusively about whatever banks are on the list of counterparties today. It's usually thought of much more broadly, but equally in maybe a way that the kind of discretion is there to assess at the time what is appropriate, as opposed to provide some kind of ex-ante guarantee that you can just show up and receive liquidity. Let me emphasize also, of course, because it's important to say it's not the case we think that the fact that the financial system now has a much bigger role for non-banks is compared to the kind of factual of just relying on banks. Having banks and non-banks has to provide more diversification. If some of those non-banks are long only investors where the people bearing that risk are well able to bear that risk, that's fine. We have this intermediate category where we think about it, which is where it's more bank-like, where there's kind of short-run liabilities. Well, the question is whether the investors think they are short-run, safe liabilities, or whether they fully recognize these are really much more equity-type investments. So there's a lot of uncertainty there, but it would be important to say it's not the case that this is somehow making life worse. It's just a new type of system in terms of understanding what are the financial stability implications of non-bank intermediaries. And it really focuses on, number one, leveraged non-bank intermediaries, and number two, this issue where some end investors may perceive the liabilities to be liquid when they're not. Richard Port has long been in business school and advisory scientific committee, but also joint expert group on shadow banking of the SRB. And it's in that role that I want to put my question. I was pleased to hear you say what you said about, and the president as well, about the shadow banking monitor. But we're now in the stage of preparing the force shadow banking monitor. And as you refer to two boxes in the current one, in the light of the next crisis, where's the next, how to stop it, et cetera, what boxes would you suggest, what topics would you suggest we might devote special attention to for boxes in the next issue? Thank you, Richard. I think Richard is trying to catch me out on the spot, but actually I do have an immediate thought about that, which is at the interconnection between non-bank intermediaries and property markets. So I can tell you we are definitely working on this topic about understanding when you have all of these new types of institutional investors coming into commercial real estate and residential real estate, understanding the balance sheets of those entities. How much leverage do they have? Where is that financing coming from? So I think that could be an interesting, because this is one of the things I was trying to say in the speech. Historically, and even the phrase shadow banking, sort of connotes that you have to think about its relationship to the banking system, but then you want to think about the relationship to the real economy, it's really through the banking system. Whereas when you have a serious amounts of direct lending going on, so whether it's insurance companies providing mortgages, other types of intermediaries being players in property markets, then that kind of real channel is becoming increasingly important. So I think, I'm not a big fan of the phrase shadow banking at this point, because the kind of topic of market-based finance and part of it is shadow banking, part of it is other financial services. I think there's no shortage of boxes, but I'll give you one, I'll give you one, okay. The use of the CCB is of course a fascinating issue, because we know how it works in theory. The question is how will it work in practice? If I remember correctly, the Swiss National Bank applied a similar instrument some years ago, and they somehow felt that it was just not powerful because the real estate market is so strong, you suddenly have so strong inflows that this incremental increase was not strong. My question is whether you have any observations on the experiences you have observed from other central banks, and if it is not sufficiently effective, what are the next steps then? What's the plan, so to say, in general? This goes back to what is the objective? So if the objective is, I mean, I think you can, if you have a borrow-based measure that limits the ability of households to take on debt. I mean, we do that, it doesn't matter who's the credit provider, whether it's a bank or a non-bank. So if you operate on the people on the households, that can be effective in building household resilience. If you can operate on the domestic banks, even if other banks overseas, so one historical thing in the mid-2000s, some countries had these measures, and the domestic banks just lost market share to foreign banks. Under the hand, that may not have slowed down the credit boom, but the allocation of losses was redirected. So you can have a lot of gain, even if there's no impact on credit dynamics or house price dynamics. It's really the allocation of risk. So it'd be nice to be more powerful, but even if you cannot deliver everything, these still, I think, have some value, which again goes back to what are you promising? What is the objective? What are you promising? What can you deliver? So I think the inability to control house prices does not mean you say nothing is possible. You do what you can. OK, I think the fact that we are 15 minutes ahead of schedule reflects President Draghi being 15 minutes ahead of schedule. So I think we're on time. So with that, let me thank you for the questions.