 Hvala vse, da se vse možete vzlušati. Zdaj sem zelo svoj, da sem moguš vzlušati taj primer panel v primeru konferenciju SSM. Tukaj tukaj panel je nekaj supervizori, nekaj nekaj. Tako da je tukaj panel, nekaj nekaj vzlušati, More looking to the outer world of financial stability and financial reform. This one is particularly focused on looking at the SSM. And so the idea is to use this opportunity and the high level of the speakers that we have to do a little bit of reflection, maybe an assessment on the achievements, on the state of play and also the areas of progress, perhaps of improvement, that we can identify in the SSM. Now, in the exchanges that we've had among the panelists before today and in preparation for today, we have often made reference to the concept of the notion of SWOT. This is the planning tool that is used to assess and to analyze the performance of project and structures, etcetera. SWOT means strengths, weaknesses, opportunities and threats. And so you may not be surprised that maybe some of the speakers will refer to this structure in presenting their views. So to do that, we have chosen four persons that are not only outstanding, each in himself, but also occupy a particular position and have a particular point of view relative to the SSM. So let me introduce the speakers. On my far right, Matthias de Vattripont, who in addition to being a longstanding and outstanding academic, as we will hear today, his contribution with Jean Tirol, are well known. He's also an active supervisor in the National Bank of Belgium and a member of the supervisory board. So he presents a little bit the insider view, not inside in the ECB proper, but inside in the mechanism, in the structure. And so Matthias will go first. Then we have on my right Gunter Dunkel in his dual capacity, a CEO of Nortel Bank, which is a very important Landesbank in Germany and also president of the German Association of Public Banks. So he presents the view of the supervised entities of the SSM and in particular of a very important component of our banking sector, that of the German public banks. On my immediate left, Roberto Valtieri, who is the chair of ECON. ECON is the Economic and Monetary Committee of the European Parliament. And so as such is a little bit the controller, the addressee, one of the addresses of our accountability, a very important addressee of our accountability. I want to recall the key role that the European Parliament has played in the construction of the SSM. When the SSM regulation was written, there was an intense dialogue and many contribution came precisely from the European Parliament before Roberto was there. And there is an agreement between the SSM, ECB and the European Parliament for the exchange of information and for the modalities of accountability. So the European Parliament is a very important component, I would say, of the SSM structure broadly intended. Last but not least, on my far left, Andres Apir, he's a professor at ULB and a senior fellow at Bruegel, very well-known expert on many things, including financial markets and banking, et cetera. So I think he represents the community of observers, of judges, of watchers of what we do. And as such, I think his contribution is going to be very important. So the plan is to have a first round, as usual, of interventions of about 12 minutes or so, starting with Matthias and going around like this, then maybe quick rejoinders and we hope to have some time at the end to reach out to the audience, to have some comments and questions and then finally a discussion among us. So I would like to ask Matthias to intervene first. Well, thank you, Ignatio. Thanks a lot for this invitation to speak. I feel honored, just like I felt honored from day one, to be able to participate in this very, very impressive project, which is the Banking Union, first as a member of this so-called high-level group that was presided by Mario Draghi where Ignatio played a very, very influential role. And I think this project is quite exciting indeed. As Ignatio said, he suggested that we evaluate it through this SWAT analysis, and so here are the sentences I chose. And let me, I will go one by one, so you don't need to memorize them at this point. Let me start with the strength. Robust risk-based supervision built on a new European institution. I think, and Daniel said it very well, Mario also. This is really a key new institution in the European landscape with extremely impressive achievements since the beginning of 2014 and even earlier. 2014 was really amazing. One had to do this comprehensive assessment while at the same time building up the institution. I remember Daniel telling me once, when I arrived here in Frankfurt in January 2014, I was the first employee of the SSM and then it had to be built up and while at the same time conducting together with national competent authorities the comprehensive assessment. Now she rightly said that the support of the ECB has been really tremendous, but on the other hand it was also very important to start hiring SSM people and have them work very, very hard. By the way, in the NCA's there was also a lot of hard work, but we were joking, of course, often that during 2014 here in the SSM they were not working 9 to 5, but 5 to 9. Frankly, it was really very, very important. And I do think that indeed the comprehensive assessment was a game changer. I think everybody agrees with that. Interestingly, this year there is this other comprehensive assessment for Greek banks and on the one hand I think it's completely obvious to everybody that it is the SSM that has to do it. And I think that shows how established all this is. Now a somewhat more worrisome thing is that when you see the speed at which the situation can change, the environment can change because the Greek banks were part of the earlier comprehensive assessment and they were okay. But of course with what has happened in the first semester of Greece, things have changed a lot. By the way, this was not, there are at times banks creating problems for their country and at times the country create problems for the banks. Here is the second, obviously. And so when you see all these nonperforming loans and all that, it is creating a problem of the order of 10 to 25 billion euros being refined. So I think this is scary. We should always remember banking can be quite fragile even in the cases where it's not the banks doing crazy things. So but I do think that clearly the SSM has done a lot. This year, and that was under the supervision of Iñacio again, this progress on harmonization of option and national discretion has been quite important. And then the other thing, it's the assessment of banks, PILO2 or the SWEP methodology which now this year is the first year of a real convergence beyond the comprehensive assessment and I think that's, I guess, one of the flagship programs of the SSM this year and you see clearly the benefit there of benchmarking across countries, across business models. We are really moving towards this, as Daniel said, the top but fair supervision and I do think a lot of progress has already been done. It's still unfinished business as was said but I do think it's quite impressive. So that's for the strength part. What did I choose as weakness? I think, let's face it, Europe is not simple. Now you can say that, okay, nation building in peace time is clumsy. Let's face it, it beats the other ways to do it. So this is the way to go but let's face it, this is quite a complex process. I think Mario Draghi stressed the limits of existing treaty. There are things we can do, things we cannot do. Delegation is at time difficult. There is a question at some level of legal risk appetite but let's face it, we don't have always the best text around but of course we cannot go back to the voters and ask for the text to be changed because they might say no. There is still multiplicity of national laws, some of them for good reasons, some for less good reasons. So I do think this is something which necessitates a lot of work that might be better used for other things but this is a challenge that is being addressed. Maybe one area to watch in particular I think is macro prudential policies where frankly the complexities enhanced by the multiplicity of actors at both national and eurozone levels. Let's face it, our monetary union is not fully perfect. We do have once in a while asymmetric shocks so it is important that there is a national component of macro prudential policy as a complement to the only interest rate we have in the eurozone. So I think a clever idea was put forward about shared competence where both the national and the eurozone level can become stricter but this leads to some complex procedures. Moreover, even more important I think the definition of macro prudential policy has not stabilized yet. We have quite a big toolbox, bigger and bigger toolbox with not only capital requirements, general aggregate and also sectoral but also loan to value limits, debt service to income limit and all that and different actors being in charge of these kinds of things which are often politically sensitive. So I think this is an area where we should try and make sure to streamline the processes as much as possible because these things will be important especially in the context of the eurozone. On opportunity, I think this is connected to the unfinished business part of this as I will say in the end. The glass is definitely more than half full but it's not fully full. In 2014 the SSM has added more than 1,000 supervisors here in Frankfurt to the 5,000 supervisors that are still there and very useful and relevant for the national competent authorities. So in the short run, let's face it, it was not always easy to coordinate everybody and to make sure that everybody could fit in the new organization but a lot has been achieved but I do think that more can be done to really make sure that we can really use all the available information because that's a big benefit of the banking union is that we now have much more opportunities to compare. And there let me distinguish two different dimensions. First these joint supervisory teams which is in a sense a cornerstone of the new banking union. So teams coordinated by somebody here in Frankfurt with people working here in Frankfurt and in the NCA. Frankly, I think the learning has been quite quick there and you do hear a lot of people saying that this is now working better and better and as a member of the supervisory board what we can see in terms of the types of cases that we discuss, frankly it's more and more impressive the kind of information we are having and the reports that we are receiving about what is being done. At the transversal level in terms of making comparisons I think there is still more room for further improvement to fully exploit the available resources. That's partly because in a sense in the beginning all the attention was focused on these GSTs. How do we make sure the micro prudential supervision can really work as well as possible. But we have all this information that we can use to make comparisons and one idea maybe is to build synergies between the micro and the macro prudential analysis because at the NCA level we do have a fair amount of information across our own country and often the relevant market for retail banking is the country and I do think frankly there could be making connections between the transversal analysis in the SSM and the national analysis could be helpful. Finally the threat, the threat I chose was maybe not coming from within but more from outside. Let's face it, for now decades maybe centuries we have been trying to make a balance between safe and sound banking, a banking system that supports the real economy which by the way often says less capital when the first says more capital and no use of taxpayer money which of course is very important now. In theory these are not incompatible at times it's hard to achieve them simultaneously. We all know the 2007-2008 crisis but you know the savings and loan crisis in the US in the 80s was about the fact that we didn't want to use taxpayer money so we pretend that the problem was not there and then banks made stupid things and then in the end it cost a lot more money. Japan in the 90s is a very good example also where you didn't want to use taxpayer money you pretended things were okay and it was a disaster in terms of forbearance and growth. So I do think today we do see that the objectives of banking of financial stability, safe and sound banking seem to be competed away a bit by this idea no taxpayer money and this idea jobs and growth. I don't want to criticize the commissioner but you know I guess the second the problem here for example BRD saying look no taxpayer money 8% billion of balance sheet and all that frankly this could at times be dangerous if you start threatening short term deposits and by the way this one example why in Greece today we are trying to do everything in 2015 before BRD enters into full force so I do think that is something we should keep in mind the second you know we all love SMEs there was probably overshooting in securitization however if all these initiatives mean less capital for banks let's face it this is possibly a risk and in the end who will bear the risk well the supervisor because frankly as I say here supervision can only be as robust as regulation allows but often the supervisor is blamed exposed and let me just conclude here first of all to stress again that the glass is much more than half full and this for a huge task so I think many congratulations to the SSM but let me quote Charles Goodhart who talked at the 25th anniversary of Basel 1 and I remember you said Charles talking to a supervisor the supervisor's job is in a sense the hardest in the world most of your successes remain private while your failures become very much public and I think it's true and so I do think supervisors do need support from the environment at large from regulators, from politicians and I think it's very important it's a bit self-serving but I think it's important thank you thank you Matias for this your last very encouraging remark and now I give the floor to Gunter Dunkel good morning to everybody it's a true honor also to speak here because I have to commend to your risk taking Mr. Angeloni to invite such a banker here to this distinguished group you don't know what I'm going to say as one of the supervised victims so to speak and by the way the last remark also holds partly for the bankers because I feel something like that as well and I think one has to start out with and I will not skip to the model here one has to start out with commending the ECB for its achievements but I think we should not revel too much in it just one observation sometimes the ECB feels a little bit like a startup not all the processes are there not everybody knows what one wants to do and also one sees from the outside I have the feeling that the euphoria is going to change everything is clearly over so a lot of realism has come in and I think that's frankly a very good thing I can commend the ECB for setting up the JSTs for my observation I think the cooperation between the JSTs and the banks works quite well as well as it can work because the circumstances are of course difficulty so let's get over with all the good part because we are all Germans and I'm Northern German although I'm part Austrian so as a Northern German we are quick with what's good and then we go into what can be improved or what can be better and pardon me for being perhaps not as diplomatic as polite as I should be as in these circles usually it is I'm speaking more bluntly as a banker the first criticism I want to say that it's very unclear sometimes for the banks how the ECB actually takes decision and how it arrives at its conclusion especially in this rep process we know the result we know the analysis but we don't know how you get from A to B and that is a problem in itself but for the question how can I improve and frankly that's the quick question for every report I get as leading a bank it is very hard to derive what you change if you don't know exactly how you arrived it because when you know how you arrived it you know what you have to change so that's the first risk there's also a lot of unclearity what the final final capital charges will be because the system has become so complicated that if I get asked by my shareholders what's your target capital rate I have of course one but I always have to make the caveat I don't know finally I have a strep quota but I have a complicated system which adds to it and then I don't know I have of course an idea where I think the bank should be there but I think there could be an improvement in putting much more clarity there second I think data collection is a good thing it helps us to improve the bank but what is sometimes overlooked is that data collection costs a lot of money and effort and of course I have millions of ideas of what data I could select for my bank but since I run a P&L I have to be very careful where I do want to spend the money and the second part is not always and now I'm being polite the first consideration the data gatherers think about when they create the question of what data could be useful it should be the question what data is useful very useful essential and is worth gathering within the banks because I can tell you it not only costs a lot of pure money it takes attention away from what we actually should do and that is serving clients and also in this room this is what we are about we are not about being safe and that is very important but at the end of the day we need to serve clients and therefore I urge the ECB to make up its mind together with all the other supervisors what do you want to know and then keep that data set more stable so that I don't have to review basically on a quarterly basis my project portfolio what I do have to do in succession to be able to fulfill the data sets which comes from basically everywhere a remark on business models I think it's a very very good thing that we focus the supervision on business model but it is not quite clear on which banking architecture the ECB and actually I want to enlarge the picture the whole supervisory architecture at what banking architecture they are heading at what kind of banks do we want in Europe and if you want to have my interpretation of what is the ideal bank in the supervisory world in Europe it is regional we don't really like global banks it is oriented towards SMEs because that's what everybody is speaking of not so much on global corporates it's clearly oriented towards short term exposure and not long term project finance it is clearly deposit retail deposit fund we like retail deposit funding and it's clearly not trading based it needs very benign shareholders and not states at shareholders and they should be happy with the return on equity of 5% that is implicitly of what we are doing with the regulation at the moment it does not work because we need more than our ideal bank and I urge with all the questions on business model and of course if you would ask the ECB what's the ideal bank and they would answer we are agnostic about it we just need good banks but implicitly the whole regulatory body focuses in that direction and I want to point that out of this experience of one year and just as a side remark we tend to forget about it but I think also the internal conflict of interest between the two parts of the ECB and pardon me to be so open about it should not be forgotten it is there you clearly could see it when you talk about annex audit it was not the supervisory part who said we need more credit credit knowledge and credit data it was the macro side who did it and there could be other areas as well the question of charge for public credits is also clearly a thing where you can feel and understand that the conflict of interest is there so in concluding you also have by that you have seen what could be improved I think there is urgent need that the supervisory bodies aside the ECB because if I would have really a single supervisor I would be the happiest person on earth and I don't have it I have 10, 11, 12 and they need to act together between them so I urge you that the level of cooperation not only within the ECB which has pointed out but also among the supervisory body clearly has to be improved there has to be much more coordination in my view I think we need still to improve about the transparency and clarity how to improve banks what's the result in my view and of course I support very much the level playing field and the question of that we should harmonize our European side we have made steps but clearly the more difficult steps in my view are still in front of us with an apology for a very clear and perhaps sometimes unusual language here but I think that's very important that we make some progress for the next year I conclude my remarks thank you very much for listening so patiently to me Thank you very much Erdunkel for asking pointed question to the ESSM and also giving the answers Roberto Gualtieri Thank you it's been really a pleasure to be invited to attend this forum and to celebrate this first birthday of the ESSM which I agree totally can be considered this first year quite successful and as Ignatio Angeloni has reminded the European Parliament has been since long time strongly supporting advocating the necessity of this and the possibility of this leap forward so the necessity and possibility of complementing the single rule book and supervision not only to enhance stability, confidence in our banking system but also to create a real level playing field in banking market to enhance financial integration to foster sharing within the monetary union and to contribute to break the link between sovereign and banks at national level so indeed I think we can as been a success both on operational point of view and in terms of its supervisor equality and that its added value is clearly evident already after one year of course there are still margin of improvements and great challenges ahead so I will try to say something about those elements focusing on operational progress on one hand and on the supervisory policy on the other hand but before doing that I would like to underline that the accountability framework of the ASSM is an element of strength which provides I think great legitimacy to its operation and of course puts also a lot of responsibility to the European Parliament and I can say that the exercise of democratic accountability by the ASSM has been very efficient and I really welcome the ECB transparent attitude in this area so first of course we in the framework of this accountability framework we will present in the first annual report I am the reporter so I will with the possibility to have more detail identified just some elements in the area of operational capacity indeed I think the successful launcher of the ASSM has been should be considered a remarkable achievement especially if we consider the short time the constraint, the really enormous difficulty of the effort I will just list a number of elements that I consider remarkable that I think is worth recalling because it's true sometimes things that good well are considered obvious and one tend to focus more on problems so I think that the recruitment process has been swift and is providing really a good blend of competencies, cultures gender and this is really giving credibility to a supernatural nature of the ASSM we had the rapid drafting building on national best practices on supervisory manual laying down common process procedure methods for conducting this rep I will come back on that and very efficient setup of the IT infrastructure and supporting analytical tool a thorough and widespread training activity program for NCA's and ECB staff composition of JST catalog that they established with the credit institution also of course further improvement can be pursued including by better involving NCA's in the day-to-day functioning of the JST in the decision making process and the process devised to efficiently work of the common procedure authorization of qualifying all these licensing, spasporting fit and product assessment of course it is clear a significant share of work which is devoted to administrative procedures and its importance not always seems commensurate to the effort required so the parliament is ready to consider proposals aimed at reducing the operational burden on structures at 11 for instance by delegating certain decisions on specific administrative issues within of course in a limit and guidance and we see also margin of improvements in the quality of interaction here maybe the two keywords are dialogue and predictability we note that from the side of supervised entities there is a request of better early planning for instance of supervising activities as meeting there is a request of more let's say feedback and especially it has been reminded right now the need of better understanding the common supervisory approach which is underlying the concrete individual micro prudential measures the solution can be many more transparency, more dialogue maybe some element of also direct interaction between more the horizontal one and the banks on the other hand we have to know that many of those problems are also physiological if we consider that the same time banks are experiencing this hugely forward the phasing of Basel tree and overlapping with that also the discussion very advanced discussion on about other additional measures both prudential and structural so it's clear this feeling of uncertainty as objective reason but I think everybody should do it's part in try to to addressing this problem and then the area of supervisory policy I agree totally that comprehensive assessment has been a game changer fundamental step in restoring confidence lost through the crisis years in announcing resilience of our banking system both by improving realization and improving transparency and also is really important that now the current can be based on a new full European methodology of course we understand that this methodology has been finalized during the work so it might benefit of further refinement but it's clearly an important step forward of course some problems I think are also the consequence of not always clear provision of the legislation we understand that currently there is a problem in identifying the better stacking let's say of a different buffers pillars and addressing the problem of the interaction with the maximum distributable amount is a problem because it's true the legislation is not clear but at the same time I think this factor does not prevent the supervisor to use the appropriate degree of flexibility if one takes into account what other jurisdiction are doing also within the same legal framework so I don't want to give solution it's not our job but it's not explicitly forbidden that the pillar 2 can be defined in different element in element which triggers the MDA restriction which are also very relevant for the 81 bond bond market another crucial aspect which we strongly support is the work that has been undertaken to enhance the quality and the comparability of capital and to properly measure the different forms of risks so we strongly support the work on the homogenization of risk weighted asset which is pivotal for comparability purpose and on internal models for calculation of banks capital requirements I think further step are the same time necessary to reinforce the capacity of scrutiny of the bank financial activity in order to improve the capacity to look beyond credit risk to all form of risk and last but not least there is the point, the issue of the option and national discretion whose problem produced by the legislature and clearly who is in coordinator exercise may substantially endanger the effectiveness of the single supervision and also the banking union project so we really strongly welcome and support the initiative and the intense work undertaken by the SSM on the revision of the O&D this is a clear example of the complementarity between single rule book and single supervision and of how a single supervision is a dynamic element that can foster further convergent rules so we look forward to the incoming consultation we understand the decision has been taken and we expect the package that if on the one hand should of course be implemented with the necessary gradualism on the other hand should be sufficiently ambitious and comprehensive should address all prexisting barriers and segmentation this consideration about the unavoidable interaction between supervision and regulation lead me to the final remark which is also connected to the remarks that I heard from other speakers about the need of strategic coherence clarity that the dilemma between soundness supporting economy, not taxpayer money so this tell us that clearly we have to know this is obvious but it is important to fully understand that SSM is an integral part of the banking union of the broader EMU and new governance framework and this means that to reach it goals and to be fully effective and successful the single supervision requires on the one hand substantial steps in completing banking and economic union and also in building a single market for capitals and on the other hand a success of the efforts for relaunching sustainable growth and promoting stability so having stronger governance and better policies requires on the one hand clearly independence of different institutional actors full respect of the different mandates but it is also essential a collective capacity to ensure a certain degree of coherence a common strategic orientation a consistency and a coordination between for instance macro prudential and micro prudential policies as well as between economic and monetary policy more in general between stability and growth of course the main responsibility for these falls into the EU legislative and executive branch and the European Parliament stands ready to contribute with all the institution including the ACP and the SSM to this indispensable collective endeavour Thank you for your attention Thank you very much Roberto Gueltier in particular for the constant expression of support that we receive from the European Parliament in what we are doing Andre First of all let me thank the organisers for the honour and the pleasure to be here today to celebrate this first birthday it has been very interesting I would say as a watcher to see the conception, the birth and not indeed the one year of operation of this remarkable new and much needed institution Now contrary to many other leading central banks the Riggs Bank in Sweden, the Bank of England the Federal Reserve in the United States the ECB was not created at a time to solve or to deal with a financial crisis we had to wait until the the financial crisis in 2007-2008 and eventually the sovereign debt crisis and the reinforcement of the financial problems in Europe to see the ECB be granted powers over supervision Now as we were asked I will make my assessment of the strength weaknesses opportunities and threats to the SSM against this background of the fact that the SSM has been newly created and was created at a special time and that special time although matters have changed we are still in a sense in the midst of difficult situation Now I think first to look at the strength it is clear that in one year of operation as many speakers have already indicated the SSM has achieved a lot it has kept its promise with the comprehensive assessment I think a page has been turned it is clear also that the people who are working in the SSM highly committed their mission oriented and indeed as I said the SSM was created for a mission and I think there is that feeling when one talks to people to the supervisors involved in the SSM that they are part of this mission and that they are giving their best efforts and their best endeavour to deal with the issue at hand so I think indeed that is certainly a strength what has been achieved in the orientation of the people who are working in the institution the high caliber and the high quality of the people Now it is clear at the same time though we are not anymore in the crisis mode that we knew in 2012 in 2013 before the creation of the banking union and yet we are not in a steady state we are not out of the woods we are certainly very much still in a transition period we are still living through some of the wounds of the crisis and I think there are two reasons really why we are still very much after one year of operation in a transition period the crisis not yet over the intensity is maybe past but many of the elements are still remaining I would say that there are still two reasons why we should consider the current position of the SSM to be one of transition the first one is the one that has been indicated by Mario Draghi in his speech that Matthias de Wattripont emphasised is the incompleteness of the banking union we know that indeed the European governance system in general is highly complex and the banking union is certainly part of that and we heard President Draghi emphasise very much the need to complete the banking union we can't have the SSM out there without the support and the cooperation which will be much needed for the new body the single resolution mechanism and hopefully soon a deposit insurance mechanism one could also address something that is dear to Charles Goddard the notion of land of last resort do we need also to have the ECB function as the land of last resort to those institution at least those that are directly supervised by the SSM so I think there is the governance matter that needs to be completed and rather sooner than later certainly but I think that there is a more substantive reason why the current period is still very much one of transition why we are clearly still away from the steady state and we all hope when supervision will become once again very boring the other reason is the economic and financial situation very simply I think we are still in a difficult time both on economic and on financial grounds and I would say one is the legacy problems the legacy problems are still very much present more in some countries certainly than in others but when one looks at the euro area one can see a lot of legacy problems and I will say a word on this in a second and the other is the difficult macroeconomic environment with low growth and low inflation now on the legacy issues legacy is not just and it is certainly very much but not only the issue of the high debt levels that remain in some countries private debts public debts different mixes in different countries the non performing loans that are there but it is also the fact that has been alluded by several speakers is the fact that as a result of the crisis certainly regulatory requirements have been increased and we are in a situation where we don't know exactly what is the business model of the banks that is expected by the regulators by the supervisors but even independently of that the banking world is certainly in great flux for a variety of reasons that are related to the crisis and the regulatory supervisory environment that has been changing a great deal but there are other factors including the digital economy so I would say that the banking sector in Europe for a variety of reasons including what we discussed when I was with Martin Helvick at the in the advisory scientific committee of the ESRB the notion of over banking one can discuss what it means exactly in different views but one can see that the banking sector as a result of all of those tensions some external to the crisis and some directly related to the crisis is going to undergo a great deal of changes and the dust is not settled certainly and maybe we are the beginning of some of those changes so I think if you look at the legacy the fact that the banking system is going to be in great flux and then you add the macroeconomic environment of low growth and low inflation and frankly if you look at the next five years all central scenario would be low growth and low inflation though we all hope that we are going to obtain results on both fronts on the fronts of inflation and on the front of growth I think it would be safe to consider that as the environment now I'm coming obviously as a result of that now to the opportunities and threats for the SSM seems to me that the ECB is in a challenging posture on the one hand with its monetary policy tools it has to fight low inflation it has to help us improve the macroeconomic environment in a difficult global macroeconomic environment it's not just a problem as we see in the eurozone the difficult macroeconomic environment of low inflation of low growth is something which is global today so difficult situations for central banks in general not just the ECB but the central banks in general to fight that low inflation situation and on the other hand the ECB in its function of SSM has to be dealing with this transformation of the banking system and the legacy problems and the legacy problems that can be quite challenging again in different countries and with all the political implication that it has so I would say that the great opportunity for the SSM in the coming year or coming years is to put some order in this situation is to continue to make progress yes there was the comprehensive assessment yes there was no the situation about Greece I would say it's a good start but there's a lot more to be done a lot of more challenges to be done and that's a great opportunity for the supervisors and the quality supervisors that discussed before to be able to do the job the threat is that the weakness of the system the weakness of the governance system in Europe will remain and will remain that those problems of governance will not be solved in time for some of the challenging choices that the SSM will have to take and that it may pose real issues for the system so let's hope that indeed it will be a year or years of opportunity rather than threats but I would remind my supervisory friends and I think Matthias was very much on this line in his conclusion that indeed one has to watch for the threats and the opportunities Thank you very much Andrei and all the others I have collected a large number of important points and I want to mention them telegraphically because I don't think they should be lost before reaching out to the speakers and to the audience Institutional complexity and legal complexity this is a daily problem as we move on to concrete cases to have a reliable, transparent easy to administer framework in particular to distinguish the national legal responsibilities and prerogatives from the European ones we have some overarching rules when there is a clear conflict European law prevails and we have the transposition laws that we have to apply but in a number of concrete cases we need a better roadmap to understand where and how one prevails the other one prevails or the two interact this is a very important point that I think was raised first by Matthias and then by others second also a key element the narrow path that the supervisor has to walk between stability and no bailout no bailout exists in the European rule it exists for sovereigns it increasingly exists for banks and yet we have a mandate of stability and it's very critical very complex to call a judgment in every concrete situation as we move on particularly in our authority a supervisor to be able to make the right choices between these two elements number of points by her Dunkel, thank you very much for your frankness I think that was exactly right to point to a number of problems the first is transparency the first that you mentioned transparency of the threat transparency of the methodologies in general people like me that are unfortunately old enough to have lived the transformation in central banking in the mid 1980s and 1990s remember that secrecy was one of the hallmarks of central bankings at the time and since then there has been a long evolution I remember a time in which central banks would not even publish their models, their econometric models because that was considered part of the necessary element of secrecy in the conduct of policy and things have changed a lot I believe that now we live in a world of communication and transparency is more and more important we are accountable towards a number of authorities and evolution is in progress in all fields of public policy and I think that supervision cannot and should not escape that that process parsimony in data collection in information collection in compliance burdens the problem of duplication of authority we are in a transitional phase so to some extent is necessary and actually useful that there is a temporary overlap of some elements of control the legacy ones from the national authorities and moving into the european ones this is unavoidable and I think healthy in many respect but there has to be a limit to that and we are responsible for ensuring that there is efficiency there the question I think raised by Roberto Valtieri of the question of the hierarchy and the interaction between the different prudential precautions and prudential buffers the macro and the micro and the overlap that exists between them and where the MDA is located all these things I think are very important there is an effort to make these rules also consistent globally not only in Europe because of course European banks compete with global banks and there are different rules etc. there is a dialogue there but I think it's very important to progress to more transparency and more comparability in a global context issues of over banking we know very well, we've dealt with that banks are going to live in a context of low growth for a while and so business models have to adapt in order to make those banks sustainable in this different environment all these things I think we have to keep very well in mind the list of issues that we are collecting from this conference and that we need to reflect upon and work on having said that I don't want to occupy more time of the rest of this panel, we have another 12 minutes or so before the coffee break so I would like to ask first to the speakers whether they want to immediately intervene on one another or one of the issues that I've raised and if not I would be willing to get some questions from from the audience and I think I see Karel Anu over there if you can pass him a microphone please Karel Anu, Seps Karel, please Thank you and Jachnil thank you for inviting us and thank you for excellent introductions and panels I would like to hint on one issue which I probably haven't heard enough you referred to it and also Mr. Dunkel is the issue of regulation and complexity of regulation in the sense that it creates a risk that bankers as well as supervisors are under so much pressure to do to check so many different things that we can't follow anymore I mean that the broader picture is missing if I think for example at the CRD and CRR which have 75 different ITS and RTS meaning implementing technical standards for those who do not know and the regulatory technical standards which in principle have to be checked by the European Parliament but there is such a burden of rules because of the single rule book that basically the only task which supervisors and bankers are doing is box ticking and in the end not really doing applying the proper judgment to supervise or to manage the risks which they are exposed to thank you Thank you Karel Go ahead I really couldn't agree more from the real practical life really priorities of a CEO of a directly supervised bank I really have to agree for it we are catering for the wrong issues and I'm not saying that we should not care for data we should not care for quantities we should not care for datasets for risk management I'm all for that, I've learned a lot in that but we are on the brink that the business models don't work anymore because the availability of focus of management is not there anymore and I really have to support that part, I'm very grateful that you from a supervisory point of view I could not agree more and it's starting to shape business model this bank is selling businesses because we believe it's not worth the supervisory trouble to go through in private banking in the absence of bank I don't think by the way Thank you, in the absence of Commissioner Hill and Mario Navar, who unfortunately have left I think I have to spend the word also in support of this legislation because we applied so the problem that you mentioned is a problem for the banking sector is also a problem for us I have to say that the CRR, the regulation is an extremely powerful an extremely effective instrument I mean we could not run the SSM without the CRR with only directives, no way so that works very well it is also true that the CRR was written when the SSM was not even conceived so the norms with options and discretion, flexibility national peculiarities, et cetera was designed for a system in which there were different supervisory styles different supervisory approaches and so this makes it very I agree with you Karen it is very complex to apply there are reviews of this legislative piece there is an evolution and it is everybody starts to push in the direction of simplification and more effectiveness Matias, please on this Yes, thank you I mean of course things are never simple enough and there are a number of levels of complexity first of all there is the worldwide level Basel is complex and CRR is only in a sense the application of Basel to Europe and clearly there is an attempt in Basel to try and simplify things a bit then there is the SSM is a simplification process there is in fact a startup phase complicated but when you Mr. Dunkel said it looks like in Europe we want regional banks the first beneficiaries in a sense of the SSM will be banks that have activities in a number of euro area member states and there will be a streamlining we need further streamlining maybe we are asking in the first phase indeed for too much information and streamlining is necessary but in this sense there are also a number of forces towards simplification on the other hand it's also true that the crisis has uncovered quite a number of dimensions where there were a bunch of things that were not very nice that were happening and that we are trying at different levels to prevent and of course it brings more policing and more these kind of things that have happened we have please Robert I substantially agree when one has to take into account first the complexity of Basel that was there second the overlapping of direct deregulation and the SSM is on top of that in theory should be something which should reduce the complexity not in ends and it is partially doing is that bigger and more distant supervisors tends to have the need to be more based on quantitative element that the capacity of established qualitative dialogue so we have a double dynamic on the one hand the dynamic of simplification on the other hand and hopefully temporary complication and more distant dialogue so these are the two elements that I think should be distinguished and not confused then of course we will try to contribute to this simplification streamlining while of course keeping the prerogative of the parliament in implementing the international standard taking into account the specificity of the European society economic models and plurality of banking models like we did in the number of elements SSM is growing factor in the way when we transport Basel 3 and of course we will I see here Sylvie Goulart whose reporter on a delicate point of how the Europe can also speak with one voice and when it's international foreign and can be more activity, a proactively an actor and contributor to define global standard and implementing them taking into account also European interest ok, we have three minutes so we can certainly fit another question if there is one I cannot see, yes Stanislava Kapirolo from Slovenia Thank you I have a question for Mr. Dunkel while I am really very impressed by the feedback that you proceeded straight forward very transparently and I can describe to all your ideas behind these feedbacks for further improvement of SSM work there is one issue that always struggles me a little bit on one hand there is true that there was a lot of changes in data requests coming from the regulatory supervisory framework but on the other hand being a banker I mean this is information that each decision maker in the banking system should have for his decision making process so what is really the issue is it technical support I mean this should be in the banks available if you want to run a bank well Thank you very much for being able to clarify that it's not that the data is not useful of course the data is very useful the request is very simple tell us once what you want to know leave it alone for I would say 24 36 months and then make the next change what is driving us crazy is the constant new invention of this is also useful to know I don't deny the usefulness of any data nobody is inventing any crazy data sets but for us we have to implement it so my request is not stay away from data because it's not useful that's not my point my point is we have to get our act together organizationally that you tell the banks this is what we want to know and that's it it will be unchanged for the next 24 or 36 months then I build my systems we then take the next step what drives us crazy is really that everybody can invent data sets and push it on the banks and we can't do our proper job serving clients this may be partly due also to the institutional complexity and different authorities in your because as far as the SSM is concerned we have set up a reporting system and that's it and you can build your systems based on that but unfortunately there are others another minute anybody else who would like to yes Martin Helbig the SSM was created to dissolve the bank sovereign nexus President Draghi talked about the fact that it shouldn't make a difference as to which jurisdiction a bank is located in now we've seen in the case of Greece that even after the Greek banks had gotten through the comprehensive assessment fairly easily there was an issue about whether or not emergency liquidity assistance to Greek banks was justified in a situation where the problems came from the sovereign and presumably there being subject to the political actions of the sovereign rather than from the banks so the question is does the Greek experience mean that we cannot get rid of this link at all I have an urgent request I think that the result of the experience is positive I think that the conditionality approach with which we solve the problem of on the one hand the no bailout on the other hand also the need to preserve the integrity of the eurozone so the fact that the stability assistance in link to conditions finally the condition prevails the will to apply the conditions of course condition can be changed relating to national democracy outcomes but has to be defined together at European level so if you apply condition you can have stability support and you can address on the side of the sovereign part of the problem then of course there is another part that the dilemma that has been said cannot be fully solved if you have a fiscal backstop at your level so that's another missing part there is not only the bridge financing there is not only the deposit guarantee but there is also the fiscal backstop that was part of the of the regional agreement that we expected will be start to be implemented not too late because this is part of a global picture last word to Andres appear we need to close I'm on Martin's side and that's the reference I made to the lender of last resort I think there needs to be lender of last resort for all the banks in the SSM and it needs to be unconditional it's unconditional the only condition obviously is solvency there's no other condition than solvency and I think in this case there was not an issue of solvency there was an issue of liquidity and I think therefore the lender of last resort should not have been an ELA should have been provided by the ECB on an unconditional basis that's the lender of last resort we have a word of last resort to Matthias de Matripo if I mean I don't want to start a debate but I guess the current 10 to 25 billion this is not a liquidity issue it's a solvency issue and therefore it brings the question indeed I think Greece is a very interesting case and we should think about it deeply because by the way the 10 to 25 billion that are needed is not of course because the state has defaulted the state has not defaulted it is because indeed lending to the local economy has got into trouble very high NPAs and all that because of trouble originating the macro trouble originating of course with the Greek sovereign and all that and so I do think that what we are witnessing is that all banking sector in a number of countries is extremely fragile not because they misbehave but because the economy is super fragile and so we need better buffers, better automatic stabilizers in the system I think Basel 3 is already better than Basel 2 I don't think it's enough and I think we should think hard about this because otherwise I mean we cannot close the banking systems of countries that have big macro problems that would not help and of course now a backstop that's a nice word, by the way everybody loves the word backstop but it's synonymous to the word bailout that everybody hates so I think we have to think about that and I do think we would need indeed more automatic stabilizers in the banking sectors and that would of course have to be prepaid by the banking sector and so on but I do think there we have it's not enough, the banking union is not enough I think to break the link