 Good afternoon, and welcome to the seventh annual conference of the European Systemic Risk Board, entitled Financial Stability Challenges Ahead, Emerging Risks and Regulation. I am Connie Lotzer from ECB Communications. We have a very interesting but also tight program for you today, so since this is an online conference, we will try to keep to the times as set in the program. Before every panel, I will quickly go through the rules of the game to remind everyone how it works. But without further ado, we will start the conference now and give ECB President Christine Lagarde the floor, who will open the conference in her capacity as chair of the European Systemic Risk Board in a pre-recorded welcome address. It is my great pleasure to welcome all of you to the seventh annual conference of the European Systemic Risk Board. Studies throughout history have always found ways to alert people to the potential materialization of risks so that they have time to successfully anticipate them. Some methods are simpler than others. In the Middle Ages, for example, village bells were rung to raise the alarm. But today, no bells. The complexity of our economy means that risks can appear from all angles, and the task of signaling them is often assigned to expert bodies. The ESRB was set up precisely to identify the risks emanating from an interconnected financial system that national actors might not see. So remember 12 months ago, the ESRB published a general warning about financial stability risks addressed to all European Union and national supervisory authorities. This was the first time such warning was issued in the 13-year history of the ESRB. So we thought that one year on, we could begin to take stock of that general warning with two questions coming to the fore. First, to what extent have the risks that we described materialized so far? And second, how impactful the general warning has been in increasing the financial system's resilience. So let's look at the first one. We issued our general warning in September 22, a time of exceptionally high uncertainty. The Russian invasion of Ukraine had combined with other factors to increase the likelihood of tall-risk scenarios materializing. Europe was facing the risk of drastic shortages of gas and oil as winter approached. And the sharp shift from a decade of very low rates to much higher rates in a short space of time, all that being necessary to fight rising inflation, of course, also risked exposing financial imbalances and sparking substantial market volatility. At the time we warned that all the risks we foresaw could materialize simultaneously and amplify each other's impact. Now fortunately, this scenario has so far not come to pass. But some of the specific risks we identified have partially materialized. First, we expressed concern that households and companies would see their debt-servicing capacity affected. While employment has remained very resilient so far, households' real disposable income has command us significant pressure due to high inflation. Second, we highlighted risks stemming from a sharp fall in asset prices. We saw these partially materialized with the failure of U.S.-based regional banks, the guilt crisis in the United Kingdom, and more recently in the price fluctuation of U.S. Treasury bonds. But there were other risks which have not materialized, at least not yet. We warned that a deteriorating economy could threaten the asset quality and profitability of credit institutions. Yet, European Union banks now benefit from higher levels of profitability than at any point in the past decade. Non-performing loans remain low, supported by stable employment levels. And residential real estate markets, a key exposure for banks, have been slowing down but in an orderly fashion so far. But our view remains that all relevant institutions will need to continue to take action to prevent these risks from materializing over the medium term. Bank profitability will be adversely affected by the rise in funding costs, reflecting higher policy rates, and by much lower lending volumes. And the enduring combination of low growth and higher debt servicing costs will continue to strain vulnerable households and firms which could see non-performing loans rising. In addition, the list of vulnerable nodes in our financial system remains long. For example, money market funds and investment funds, notably those investing in illiquid assets, and channels of contagion could still reemerge. In particular, the margin policies of central counterparty clearinghouses could amplify stress in the system. EU banks' holdings of fixed income securities could be marked down quite significantly should they need to be sold. So it would be unwise to be complacent. The ESRB will continue to monitor developments carefully. So let's look at the impact of the general warning so far. How has the warning been impactful in increasing the financial system resilience after one year? In other words, what have you decided to do as a result of this warning? We address the warning to all EU and national supervisory authorities in the banking and non-banking financial sectors. These authorities interact frequently with their supervised or regulated entities which in turn take thousands of risk management decisions every day. This makes it challenging to pinpoint the exact effect of our general warning in this vast ecosystem. But we can still understand its impact across two dimensions, awareness and action taken. And it is precisely because we stand at the heart of this ecosystem that we can create a broad awareness of the risks that we identify. While by law we could only issue the warning to public institutions and not to the general public, it was reiterated across the network and it did resonate. Awareness has acted as a catalyst for action too. The warning has enabled policymakers and supervisors to anchor their decisions to our assessment and has helped them to push through necessary reforms to their macro-prudential and micro-prudential policies. And ESRB warnings also work in more subtle ways, not only as a catalyst but also as an inhibitor. They may help slow down decision-making and so avert hasty risk management decisions. Supervisor may pause for longer in assessing whether an institution's vulnerabilities are critical and policymakers might more strongly resist calls for watering down legislation. So our assessment in retrospect is that the general warning has proved impactful over the past year. The ESRB words have clearly worked towards reducing policymakers inaction bias with regard to the implementation of macro-prudential policy. On the other hand, our work is not finished. But I'm firmly convinced that the joint action of the EU financial stability community at large will be sustained and unwavering so that our warning will have helped to avoid damage to the economy. So in conclusion, to date, Europe's financial system has avoided the worst-case scenario of severe systemic risks materializing all at the same time. But policymakers need to remain proactive and alert to financial stability risks as and when they arise. As Abraham Lincoln once observed, leave nothing for tomorrow, which can be done today. And turning to today's conference, I have no doubt that it will provide for a stimulating discussion about how macro-prudential policy can help us best tackle the financial stability challenges that lie ahead of us. With this, I now open the seventh ESRB conference.