 Yes, I come from the country which had really a privileged view on the SSM experience in the making in the last three years and we know a lot about what has been discussed today and we heard very relevant policy messages especially in the morning we had vibrant discussion, we heard bright ideas and great vision of the future and I'm really happy that the world business is back on the headline of our panel sustainable business model for today's banks because there are some very basic questions that are like the elephant in the room like in this environment with negative interest rates with digital transformation with regulatory pressure is a sustainable business model does really exist for bank and banks make money and help the economy how can they tackle the profitability challenges where do we set the boundaries between supervision and management of banks and how can we and banks can survive with the disruption of technology so we are happy because we do have a terrific lineup of guests here's and I introduced this briefly Andreas Dombrae who's member of the executive board of the Deutsche Bundesbank and we have Sabine Lautenschleiger vice chair of the supervisory board and member of the executive board of the European Central Bank Jean-Pierre Moustier who's CEO of Unicredi SEPA, Jose Maria Roldan chairman and CEO of the Associo Central Española de Banca in Belen, Romana non-executive director of Banco Santander with a long experience as a civil servant she was head of the Treasury in Spain for a long time I would like Sabine to start with Sabine Lautenschleiger to start with you because assessing business model analyzing business model is at the very heart of this rep and you've been doing this and can you start telling us how do you implement the assessment of business model how do you value business model what's the ultimate goal of this and what are the evidence in your latest experience in this well first of all I mean it will not be a surprise that all of the supervisors around the world look in death into the business models of the different banks and there is not one business model being the most successful ones that I can tell you just upfront in order to decrease the suspension here and we are looking into the business model as as one pillar yeah in our supervisor review and evaluation process and taking the comparative advantage we have as the SSM by doing benchmarking in a quantitative in a quantitative on a quantitative level looking into different business activities being comparable to other banks and then seeing what kind of evolutions do we see as a trend and where are banks in which kind of business activity successful and which what kind of underlying facts are they successful and as we do have 125 systemically large banks and we do have a kind of yeah we have a scope to look at yeah this is one of the advantages of the SSM to have this kind of quantitative analysis but it's not only about quantitative analysis it's about looking into qualitative aspects to it's about supervisory judgment everybody here who's a supervisor knows this it's supervisory judgment to with regard to what kind of macroeconomic environment does the bank right now have how do they cope yeah with this environment what kind of plans forward-looking do they have and what kind of mitigating factors can they draw upon when the macroeconomic environment is not as feasible favorable as they would wish to have it all this you know together with what kind of risk emerge and what kind of risk management yeah we look at and then it comes together in a kind of scoring yeah it's not a rating model but it's in a kind of scoring which then follows into to a capital add-on if necessary and in many qualitative measures what's the outcome of this this job I mean would you eventually pick up the phone and say champion muster you have to do more asset management and more investment banking and less again we are not the better banker and this is not our task our task is not to tell a bank manager and what kind of activities he or she should decrease or increase this is a strategy question which has to be answered by the board of the bank for us it is rather the question of do we assess the business model as viable and what kind of risks come out of these business models and how do we act with regard to our supervisory expectations towards the bank on the basis of our assessment of the viability of the business model when you launch the transform 2019 that the new plan strategic plan of unicredito did you knock at some door here in Frankfurt to have advice on you know how to create a sustainable and successful business model what did you do well we of course always have a very proactive interaction with the regulator and that goes without saying I think that you know when you look at the overall situation the regulator actually the challenge of the strap is a very healthy because we tend to look at our self on an inward basis of discussion with our board on an inward basis and the regulator gives us a challenge which mention is more on the risk side risk of the strategy link to the strategy risk link to our liquidity position that's another pillar on you know credit position on cost and so you know we can challenge ourself and I get from the strap and the regulator actually a certain number of issues which can become priorities and we put against our risk a prototype framework as well so I think you know we and it's not because we're in DCB and I want to leave this building free afterwards we need to look at you know interaction with the regulator on a positive basis and I would actually take a position which is to say you know if we have a bit more regulation it actually could be a good thing why because you know we're in the world today where when we look at banks clearly the top line is going to grow but you know like the economy and in Europe the economy is not growing very much actually a few percent a year you know on a nominal basis and so our shareholders will benefit if our cost of capital goes down because you know our earnings will grow at whatever level and for a share price to to perform well you know earnings goes will be one component but the cost of capital decreasing is another one and when we're stamped regulated in Frankfurt with a strong regulator it actually gives to our shareholders in order to certainty that you know our business model is properly managed our risk are properly managed and that our cost of capital should go down so the proper interaction with the regulator the ability to manage the risk properly is from time to time heavy from time to time we say that you know it's too costly but if we say the normal tension with the regulator but there is a very strong benefit for shareholders and I think we need to maintain this proactive interaction which today I think works very well how do you see this kind of relation and how do you see sustainability when cost of equity remains higher than return on equity today Mario Draghi said return on equity has increased from point point four to more than seven percent but at the same time many banks are still looking for this balance let me start out by saying a big thank you to the ECB to invite me Ignacio especially now the relationship between regulators and regulated banks should be a teamwork with very clear responsibilities divided regulators cannot do without banks banks cannot do without regulators now and we are more supervisors than really regulators now the cost of equity is very low in Europe too low in Europe and that at a time where the economy is going rather strongly we have had 17 quarters of a positive growth in the Eurozone now in a row then when you would hope that you know banks would do better because we have very very little provisioning right now which normally should help the the bottom line now it is not as as Sabine said it's not the job of the supervisors to reinvent banking or to give advice on banking it's our job to do possibility checks whether or not the assessment of the banks going forward connect risk and reward in a proper way and are plausible because we are interested in the stable banking system which means we are interested in capital creation we are interested in you know the the banks earning their their cost of capital when you look at capital increases these days in Europe whether in Italy or in Germany or in other countries you see what kind of discounts you need in order to to to issue a new capital which is not a system which is sustainable forever into the future we need to get back to positions when book values are above one because and that means where cost of equity or cost of capital is higher than where returns are higher than cost of capital rather Jose Maria Rodin you saw this in the past on the other angle as you were head of the supervision of the central bank in Spain now having the voice of banks what do banks ask to create sustainable in the medium and long-term business models today thank you thank you very much let me start by saying that it's a great pleasure not just to be back at the ECB but back at this building I work in this building 23 years ago in something that was called the European Monetary Institute is stage to division the fact that you have no idea what this was about it's a good news because we have made a lot of of progress in these 23 years so it's good to be back on the on the site of of the banking industry we are we have this triangle of of regulation digital transformation low interest rate environment low interest rate environment let me be very clear when our core business is maturity transformation and given where the year curve is maturity transformation hasn't got a value it's it's a miracle that we are being able to have a return on equity that is positive that is increasing and it's getting closer to the to the cost of capital so I think that pressure works things are getting better with normalization of interest rates things would be easier because maturity transformation will have some some value then of course the digital revolution I think that it poses challenges to the banking industry I would mention the scalability factor to mention something that has not been maybe I mean raised up to now that poses the challenges for medium-sized institutions and small institutions because there's kind of there's a fixed cost element in all this digital revolution and you know the bigger you are the more this is going to be diffused serving you know your your hundreds of thousands of clients when you are a small institutions and you have to adapt to this new digital world you are going to have a kind of a fixed cost that is going to be more difficult to recover so scalability let's not forget about the scalability in this digital world we can think about any I don't want to mention any any names but if there are obvious names where where scale is a huge element going going forward so some challenges all challenges challenges for all the banks but especially for medium-sized institution is more institutions and last but not least on on regulation and I think on regulation what we need to understand is that this idea which is not the idea of DCB I'm sure that this is not the case but this idea that is sometimes floated around that we want to make banks like utilities safe and boring well banks are safer but banks will never be boring because we are going to be tied to the cycle of economies as long as the digital revolution does not guarantee that we are going to have cycles I think that banks are going to be bumpy with the economic cycle and think about digital revolution that's another element why this industry is not going to be boring for the next decade so let's not try to make banks like utility companies banks need to to have a return on equity that compensates you know shareholders for the risk they are going to go through the cycle and I think that that's an element that we need to let me check Sabina like there's like is this your idea banks as utilities no no risk at all no I mean the business of banks is to take risk but as a supervisor I wish them to know exactly what kind of risk they take and how the risk develop you know in in in the years to come so I want to have a forward-looking perspective and I want to have enough capital in a bank that this bank is able to cover the risk even if the risk increases you know with and through the cycle yeah so this is the drop to look first for the bank managers yeah and then second for the supervisor do we agree to the analysis of the business model are we satisfied with the risk management the bank has and are we happy with the capital to cover the risk but Andrew Anna what do you make of the main key factors to create a successful or at least sustainable business model for banks nowadays I think that when we talk about sustainable models that two different things one is the cycle and that means that you have to be resilient to to cope with low interest rates for the long run which are cyclical but it's taking long so you have to be really resilient that would be one thing the other thing is is more structural if you want which is being able to adapt to market changes and and I think that that we've been talking about digital digital means I think many things one is it is extremely customer-centric which was not the case in the finance industry and it's the case in other industry the other one is is being really efficient in a different way we used to to to to be efficient but I think this is more about being fast and change fast which is a completely different story I would say those are the two big things and the third thing is is is really make use of of the fact that you have millions of customers and and learn from that which is comes down to the third point which is data so the three things that define business models in the future or right now are those three ones and there's no break you started analyzing and writing also about retail banks as an indentured species at the beginning a long time ago it's a long time ago but he started I mean and the fight for survival is still on what's the ingredient of the one we discussed or if there's any other to find a new right balance you know between costs and revenues new sources and streams of revenues for banks now first of all banks are about clients and customer needs and how they fulfill their customer needs I don't need to tell anybody else and the faster in this ever faster changing world the faster you adapt the better and at the end of the day that's what they've been invent I think when she said she's looking at business models how quickly will you be able to catch the new business models of your customers and you have to react to them so it's rather simple you need to be ahead of the curve and you need to be courageous enough to adapt as quickly as possible what do you do to be ahead of the curve what you do looking at your business model for the future well first of all we keep our feet on the ground I think it's important that you know you don't overreact when you read the headlines or actually when I listen to you I mean you know bank on the threat you know business model you being dead or whatever you know it is not the case I mean you know banks are actually healthy institution which can generate profit we are today in an environment which is a bit more difficult but let's not write off the banks thinking that fintechs are going to replace them I mean I was an investor two years ago so I had a lot of fintechs coming to see me 25 year olds who were telling me that bankers were dead species and that they knew better you know I mean I have some difficulties to believe that because you know when we compare ourselves to fintech we happen to have 25 million clients and 50 billion of capital they have no client and no capital and they provide a very vertical service and you know I was meeting with a fintech entrepreneur recently I think I run the marathon faster than him and you know I am a little bit more resilient than him so you know about stamina to be able to change business model to change processes we know how to do it at unique reddit and we can be super fast when it makes sense yeah so the question is not so much you know our banks are dying breed the question is asked on the last mention is it is very important that we are slightly ahead of our clients I'm saying slightly ahead not too much ahead and we have two type of clients we have retail client on one side and we have corporate clients on the other side and you deal with them completely differently on the retail client side there is some change which are very different between the northern Europe and southern Europe Italian retail client actually don't use too much internet today and so we're going to change in Italy much less fast that we could change in Germany for instance so you have to adjust your business model in the proper way because we depend on what our client want we you know everything which has been said today is absolutely right about being multi channels about offering issues what we need to do there is to make sure that you know in an environment where the costs are important and the revenues are not going to grow very much it just to optimize our cost base and you know we were discussing about fintech and automation we need to review the process and to make them optimal at the same time when we offer a multi channel side that's for the retail side it's a it's not very glamorous but it takes time and when there's a good idea on the product we copy a fintech and if there's no patent in financial market so when I see a fintech which has a good idea I either copy it or use them as an integrator that's fine okay then we disrupt our business model we offered in Italy for instance Apple pay and we are the first one and I'm very happy to disrupt the business model by offering Apple pay to our client it's actually benefiting us majorly in terms of perception and we actually make money out of it so you know why not we're for that EP as well you know for you know the Chinese tourists coming so very happy to disrupt this money on the corporate side it is a completely different thing because you need to have the client interaction you need to make sure that you cover your SMEs properly but they want to have human beings with them so what we do there is we need to use data for the retail client in order to make sure that we optimize the marketing and for the SMEs in order to make sure that we have a better risk management system don't call that artificial intelligence it will be many many years because before we have artificial intelligency in banks is the smart use of data we have a lot of data we need to use it smartly when you do that you have at least work for the next five years to improve the bank and make them more profitable it's not just about disruptive startups it's about digitization of customers we heard today that people is more likely to go to the dentist than in a banking branch is the traditional cost structure you need to give me the name of your dentist actually because I love to go to my unique right and these the traditional cost structure so many branches and clearly many people in branches still sustainable looking at the future I have to think about the dentist this was a question being raised to the young people I think that they have good you know teeth so they don't need to go to the dentist probably they don't know how it is but yes I mean I think that there we have to accept that there's kind of a generational issue I don't see my my my sons that are 29 25 and 19 going to a bank branch they would not understand why they need to go to a bank branch if they can use you know their their smartphone to do the transaction so there's an element there are people that is still needed you know the branches but there are other people that probably we can can get you know you can deliver the financial services to them without any any branches and we will have to respond to the client needs as the client needs changes we'll have to change going forward I think that we cannot rule out that you know the reduction of branches and and employees will continue what we are seeing in Spain is since 2008 2007 2008 was the maximum 37% reduction in number of branches and 30% 32% in the number of employees employees is kind of stabilizing branches are still you know declining well we have to adapt to reality this is a scale business and with digital transformation is colorability is going to be even more relevant so we will have to adapt you have to take advantage of that in terms of cost in terms of being able to deliver to the clients you know better better services and you have to understand what they play the rules of the game are going to be for instance you know I have the perception that digital clients are going to be less loyal than than traditional banking clients and this is something that you may have to consider the digital client will be you know loyal as long as the application you the interface that they are using is user-friendly the day there's another one that is better they will switch first second we need to understand very well what are the rules of the game for instance this this go game thing we cannot use black boxes in banking because the day could you go to a judge and you say well I mean why you didn't give alone to this to this client you say well I have no idea really was the the algorithm that said that the judge is not going to accept that so in banking we need white boxes we need you know application of technology that allow us to explain you know what was the basis for the decision that was taking so it's crucial that going forward we understand very well what are the new rules of the of the game because the environment is going to change but I'm sure that they will be supervisors conduct of business rule supervisors and judges at the end so we have to also to be to be careful going forward in your experience I would agree the thing is we have to follow our customer and and he or she will choose it's not it's not to us to decide whether branches or and I so you have to follow them and they will choose and it's not only in terms of generation I would say that's also about the type of product so if you go for a mortgage probably you have a completely different interaction than if you go for a deposit or or investment decision so so for me it is trying to really understand what our customer needs and how to get there which which will change in time and sometimes it will be an app sometimes it will be a web page and that will evolve or a message servicing but our or which thing but so I think it's again trying to to make the best of their needs and trying to to get there yeah this is one of the main aspects but at the same time speaking with bankers what would and I didn't speak with champion musty ahead of the conference but speaking with bankers what they say is that if we have to make a sustainable in the medium-long-term business plan we have to have a clear idea of what regulation which looks like and how supervision would be played towards us otherwise we might put in place some business lines or make some decision that tomorrow might not be useful anymore we might promise dividends that we might not be in the condition to give to our shareholders what you make of that in terms of giving also framework in the midterm of stability and predictability to banks about the way they can build their business plans yeah well I have three messages for for for this question first of all I fully understand that you need a certain kind of predictability certainty yeah and in an environment where the macroeconomic facts change yeah and so so yes we are working and I hope that at the end of this year we will have finished the bars of form agenda yeah and that we have a certain kind of practical predictability in there but let us not fool ourselves it's not only about capital cost with regard to regulation capital requirements yeah I mean many many other questions have to be asked about the not only the branches but the question of how many products does a certain bank need for a certain amount of customers yeah what kind of organization around it do you need how can you change your cost structure with with regard to the organization around it so and whatever you calculate as cost for a business yeah it is not the capital requirement that you know the the supervisory capital requirement which is the leading cost driver and there are many other things are more important than the cost for for the capital requirements yeah it's a part yeah and still I believe you need to have a predictability but it is not the main driver from from my perspective I agree about the predictability I think what is important is actually not for the bankers it is for investors that we need to have today a proper understanding of what will be the future regulatory requirement because we have if I may say creepy regulatory requirement which are coming up we have finalizing Basel 3 the so-called Basel 4 we have a FRS 9 which is coming up we have the EBA guidelines which are coming up we have the fundamental review of the trading book and so this Basel 3 but okay the Basel 4 so we have and we have some ECB decision about non-performing loan provision as well so you have the you know a series of additional regulatory actions each of them makes sense and I'm not disputing them some of them might be correlated in terms of you know if you covers the capital for one you will lower the capital for another one for instance if you have a FRS 9 NPL there will be an NPL there is some kind of correlation and overlap yeah exactly but at the end you know we we need to to clarify that for investors so that they know where to allocate capital and when they know where to allocate capital then the market can function freely but I would say that the decision of business model as was mentioned does not really depend on you know what the regulator wants to do it's much more for investors and the proper location of capital when we look at very briefly what we did that unique credit and this is why I say it's important to keep your feet on the ground which is you know there are very simple and logical things to do we are the risk issue NPL level too high it was very obvious we did it needed to reduce our NPL and to do that we need to be credible so we need to sell a large amount of NPL initially to be able to raise capital so take provision sell NPL raise capital and convince investors that our books are properly marked and by selling a very large amount of NPL 17.7 billion we convince investors that we have the right marks it's about cutting cost we are cutting in Western Europe on 20% of the cost 25% of our branches in three years it's it's a lot basically and you know but we're doing that because you know we know that branches are going to be useless you know today we have an objective that you know 95% of the transactions which can be done online or multi-channel with an ATM online on the computer and iPad will be done there and only 5% remaining will be done in the branch what 92% so we're almost there so the you know our clients are moving there for sure for some of the advice on the mortgage side they need to go to the branch and they do that on the corporate side they transact directly with us on the internet on some of the product they need our bankers to work with them so it's an adjustment everywhere but the you know the the pass or the target is very clear the cost have to be reduced and this is not for us a three-year plan you know I've been telling our investors it's a 20-year plan I mean the direction of the cost base you know will be lower and we will transform the business model by transforming and training our team members because they will do a new job we will have less back office a professional and more people to advise our client so this transformation is taking place it's a simple you know you need to have a simple business model we're a simple pan-European commercial bank that's our business model you see and then it's simple it's straightforward and we move step-by-step please remind that you can ask questions through menti.com use the code 1696 24 for your question well done currently banks are trading at historic lows ratios if you will look at book-to-value and so on and when we speak with investors they say we have to price in instability and things that rules might change and you know something that we started to discuss what you make of this after what Jean-Pierre mustier said I think that there are two reasons why why price to book ratios can be can be you know under under pressure first I mean the quality of your balance sheet second your profitability going forward on the quality of the balance sheet is very clear that banks that have been able to clean faster are having a recognition in terms of better you know price to book ratios and going forward I think that what is still you know we need to give clarity is how we are going to move in this new digital world that we are going to be facing how we are going to adapt our business model to this to this transformation as if we don't have a clear roadmap it's natural that markets may have a doubt on the sustainability of business models going going forward in this fintech fintech angle I would say that I would agree with Jean-Pierre what he was saying that before I mean fintechs I mean four years ago I'm chairman of the Spanish bankers in a little bit less than four years so four years ago fintechs want to be bankers now they want to be bought by a bank of course the death ratio of fintechs is 95% so before your die you want to be bought by a bank so I think that the environment has changed and I think that on on both sides there more realism on the side of the fintechs they realize that they need the scale that can be given by by a bank and on the banking side I think well if I can you know instead of trying to develop this this interface I have a fintech that offers that you know and it's value for money well instead of trying to develop this throughout you know or all my own IT you know people well maybe it's cheaper to buy it so I think that that we are getting there and that we are being able to show the market that we understand what is going on of course institution will differ in terms of their strategy there are some institutions that are more more let's say aggressive in their digital transformation others that are a little bit more more hesitant but it's that's good that's diversification you know not all of all of them are going to be right and that means not all them are going to be wrong and I think that that's part of it but to make a long story short I think that the quality of the balance sheet is a question mark that needs needs to be clarified and I think what the markets want is is is a clear plan and the second one is you know business models did it that transformation where I think that we are getting there well I breathe I feel a subtle satisfaction in the fact that fintech are not taking over traditional banks and I can understand this but at the same time we are going towards some very big changes for example PSD to the new directive that it's gonna make a giant shift towards open banking it won't means just more competition but also pricing and margins that might get lower how do you see the impact of these new set of rules coming in I think that one of the key things and following that conversation is is the level playing field and that means a few things one is within the European landscape and we were we had this debate this morning around 80s and things like that so there's some of it that still needs to be closed down and the other level playing fields is with other potential competitors which are which are not banks and and it's quite asymmetric if you take the payment directive it's quite asymmetric because you are obliged to give away your customers data it's not our data it's their data that's true but we don't have access to to other sources of data in the same way so there are that creates a completely different landscape I think that that could eventually affect us and and this lack of level playing field in terms of regulation I think it is it is an issue that we should address at some point because it's creating probably a lack of balance within within the bank and I want to mention you mentioned the screen is scrapping this is a monstrosity yeah a monstrosity is that you give one of these fintechs your your passwords for a single transaction and they are able to extract all the information in your bank the fact that we are having problems convincing you know the regulators in Europe that this is a monstrosity is very worrying it's fine to have a level playing field it cannot be based you know on you know conduct of business rules elimination for these fintechs it's a monstrosity still we have problems to convince the authorities that this should be actively impeded by legislation and please there are other sources of this lack of level playing field if you take the cloud services yeah I mean it's it is something that we need to to use because of this change in the in the architecture of our IT so you do I think it's the original thing is use use cloud but even then it's quite unbalanced because you have very few number of companies giving you those services so they are analogopoly in fact so you lose bargaining power and still you need to comply with regulations that that is difficult for you to do that because you depend on them so there's a combination of things that have to do with this technical changes I think that are creating new problems and I think that we need to address those ones as well do you want to add something yes I think that you know any threat is an opportunity so PSD2 could be seen as a threat I see that as an opportunity as well because you know we can become integrators it's not only FinTech which can have access to the account of a client I mean we are today planning to be actually the FinTech and offer to other clients an integrator so that they can use us you know and and we will integrate the value second they have with values banks so you know we have always to think that banks can actually act and take opportunity from the regulatory evolution there are some you know very serious issues with PSD2 about who should be ultimately responsible if there's a data quality issue because if it's a FinTech with no capital you know who the client is going to turn to a problem you might turn to the deep pocket which is the bank so this is being discussed and we will deal with that and we'll find a solution so you know PSD2 is it a threat yes but you know this is when you have threat that you run more quickly and you turn that in opportunities the FinTech is the same so what we have to do today as bankers is just to make sure that we very dynamically review what we are doing you know I was so happy to have Apple Pay in unicredit in Italy so happy if for us it's a wonderful opportunity you know is it a threat no because you know for us you know we we develop our brand you know the visibility is increased our client do more business with us using credit card so you turn that you turn that as an opportunity and this is what bankers need to do in the future Sabine No I can only agree I mean there are opportunities related and linked to it but there needs to be a kind of balanced framework around it in order to ensure that you can draw the opportunities and I mean I'm you know I'm not so in death in this issue as it is not really a solvency supervisor and issue it's more conduct yeah but as a lawyer I asked myself as a lawyer and a customer of a bank yeah I asked myself what's about the confidentiality what kind of what kind of rights do I have to say I do not want certain people to know yeah certain things yeah and here I have another question and then the question of what is who is going to pay when there's some mistakes happening is something what needs to be and I still looked into it yes but it's not at the end anyway if I'm informed of the timetable the discussions are still ongoing let me open to question from the audience and the first one is again on the relation between your job as a supervisor and the analysis of business model because from the audience they say may we have additional hints on the mix between quantities and discretionary assessment towards business models in this right well I mean it's it's one part is quantitative one part is qualitative I'm very sorry yeah and if you have very strong quantitative evidence that something might be questionable then this will probably be picked up and not be neutralized by the qualitative aspect but it's a holistic view you cannot I mean I cannot tell you that the quantitative aspects are 30% and 70% are the qualitative one it depends on the facts supervising banks is and this is for me the most interesting development see when I started in the 90s we were quite quantitative related you know with regard to did the banks follow the capital ratio certain other ratios then we moved in the 90s late 90s early 2000s we moved into a very strong qualitative linked supervision and now we bring together as it is correct quantitative and qualitative aspects yeah so I think as a supervisor you would be totally on the wrong foot if you were only to look into figures yeah because you need to have a gut feeling you need to have a kind of forward looking aspect you need to have even in a kind of assessment what is the board member like if he's a serious guy or not you know these kind of things have to yeah I have to take into account and how did the bank cope with challenges in the last five years yeah what kind of project management do they have are they successful in the project all these questions in the qualitative aspect have to come together with some figures and benchmarking but just to illustrate and give an example without going into detail if you look at risk which is one of the pillar of threat clearly there are some quantitative items on the risk side which you know can be the cost of risk the level of NPL but there's also something which is very important reviewed by the regulator which is the risk culture and you know the risk culture is very qualitative but it is extremely important because you you cannot have a policeman behind every bank employee you need to have a guardian angel and the guardian angel in the risk culture so from a management point of view we take care of reducing our NPL by selling them we take care about having the proper risk process in order to have the right origination the right monitoring of credit the right recovery but we take care as well of having the right risk culture which means that you know we are telling our team members and we're working with them both from an operational risk point of view credit risk point of view and market risk point of view you know to develop an awareness of the risk take the right risk but be you know very careful about what you say and then in abstract terms I fully agree with you yeah but we we have to acknowledge to that if you want to change a risk culture this takes more than just guidelines coming from the management it needs time to change the mindset of people yeah so and especially in this time chain in these changing times then we need especially control and and deep controls because these are the the challenging ones yeah let me just simply compliment what what Sabine said because I can see where the question goes it's much more quantitative than you think I think the question implies that there's only a qualitative aspect to it absolutely not because when we look at it in the supervisory board we would only look at a very very quantitative analysis in order then to add the judgment but the basis is a quantitative basis this is interesting please well I think from a management point of view the qualitative side and the culture of the bank in terms of behavior of individuals on the risk side on the behavior from you know approach of values kind of risk approach of the client is actually extremely important I mean we we have a zillions of reports with a lot of indicators but at the end as you mentioned you know to change the behavior of all our team members it's about pushing the right culture and the right culture takes time but it's as well an example from the top to start with in terms of discipline we have one of our we have five business fundamental one of them is execution and discipline and when you start a meeting you say we failed in our execution discipline fundamental you know people say okay we need to work on it and go deeper in that and so I think I wouldn't underestimate you know the qualitative manager angle as well of the risk culture for instance well there's a related question that I haven't received but I heard preparing the panel which is how do you evaluate these qualitative aspects and do you have shadow co somewhere do you have algorithm how would you do that because people in barriers they're asking and when once you gather tons of documents and then you crunch this and how that process goes you want me to explain to you how I do quantitative aspects with in qualitative because you ask for shadow CEO and no no I think for this you just need experience as a supervisor and by asking questions to different banks within the same topic you get a kind of feeling where the trend is going what are best practices what are standards and whether the bank which is sitting in front of you fulfills the practices the best practices all the standard or whether it needs to to raise yeah the bar so supervisory judgment is not something what you can establish via computer and algorithm yeah but it is something what you establish first with experience and and second with using the possibility the opportunity to compare different banks with the same business activities yeah and how they deal in the market with their clients with their risk and and how they establish their their risk management that's where the SSM helps because in the past let's say the Germans had together and had their own view which always was a German view or an Italian view whatever and now we have 19 member states and we have admittedly the meetings go far too long but but the debate is a good debate at the end of the day because you have many many different inputs and a lot of experience in the benchmark is much wider and that helps so furthermore there's more neutrality in the view rather than a national bias and you get a fresh view because I mean when you are 20 years working as a national supervisor and you know in one box of thinking and now you get together 19 different yeah traditions yeah you you come to know tools which you did not expect to see as a German yeah so when I have a question for example on real estate I usually go to my Spanish colleague because they have a different experience in real estate prices than the Germans could go to the Irish to if you could go to the Irish you know so you know you you you you move around and and use the different experiences the different traditions the different tools you see there's a question again about it and investments I how much you invested when he created to in it really well we invest a lot but for the transformation of the banks which is purely the transformation not the management of the ongoing side in the next three years so including 2017 we invest 1.6 billion euros 600 million in 17 500 in 18 500 because there's a question from the audience and they are asking do banks have enough it save the board members and do supervisors have enough it knowledge to monitor banks efficiently first it in into the board but I think to the board is I think there's a two different type of knowledge one is about evolution of clients and the new digital world and clearly there's not enough of such skills in a board today and the other one is more you know traditional IT knowledge and skills in order to see how we can engineer the sheet from the traditional legacy system towards a new system there there are some expertise and we're managing that but I fair to say that if we look at our board today and you know we need more members who can bring this fresh view about what call it the digital revolution well IT knowledge is a rare commodity for sure we increased our staff with special IT knowledge in the last year in order to you know to increase our on-site inspections but we do have for sure a certain yeah the the scarcity in there so we work together with other public authorities and which deal with this matter and we work together I mean with all of our national colleagues and at the end if we if we think that we need additional resources then we take consultants yeah the way I look at it is that if you are a supervisor you better be technology neutral because if we move too fast and if we express an opinion too early we're gonna shift the market into certain direction now whilst I've been earlier say we're not the better bankers you rightly said that we're also not the better technology experts but what we need to look at is is the IT system plausible does it cover what is expected from it is there a chain of command all the way to the top is the is the responsibility taken correctly are the the dangers correctly identified is there enough thought process about it but for us to say this is the technology of the future and this may not be the technology of future it's not our job nor our skill level nor our mandate whatsoever we have to be neutral on this and the market has to settle how would you handle this from inside of the board of Santander I think there's not no one silver bullet you need to do many things you need to have certain profiles which we do we also have an international board of advisors so you have tech experts that are helping us and and the board itself is you need to be retrained once and again as a board member as I'm a citizen or as a mother in my case as well so you need to understand the world you're living in so you need to keep on being trained once and again and so we say we will go to Silicon Valley so you we keep on training ourselves trying to understand and and and supervisors and regulators can also learn and many things no and I would understand why I'm saying this now we'll understand we will understand why I'm saying this Jose Manuel was referring to the cloud you know the cloud storage that discussion was held in the Bank of Spain when I was at Bank of Spain ten years ago I remember the first reaction that we had I mean where's the data well they don't know where's the data oh my god they don't know where's the data that's kind of outrageous no now we understand that cloud cloud storage you diversify where the data is and in that respect is safer than a you know a central database that can be attacked by by any cybercrime so of course you evolve and you don't need a lot of IT expertise is just to understand you know what are the pros and cons to understand what are the potential benefits in terms of resilience of the system is a centralized system more resilient than a decentralized system no and and I think that we can we can learn and we can move forward and it's going to be you know a challenge for us because we are not a technological expert and it's going to be a challenge for the supervisors but of course we can learn from experience of course we are learning from experience yeah let me raise another point which is many business model many business plans currently they're not viable they're not sustainable because they do not have the scale that it's requested by the market and we heard this morning Daniel we as she said I'm optimistic I think there will be more merger in the future there will be more consolidation in the market do you think that consolidation is a key for sustainability of business model in the future Sabine and I don't like it well it will be one solution but I would not put first your your your general remark that we have many many banks which do not have a sustainable looking for a sustainable well we have many banks who are still in the process of process of adapting their business model but who still or which still have already have a view where they want to go to and what kind of tools and instruments they want to use in order to to achieve their goal we have about two dozen banks who for many years already earn above the average and quite close to their cost of capital and let us be very clear too as we were talking about this cycle yeah and we all as supervisor and I'm pretty sure as banker too we wish that the banks would always earn above their cost of capital yeah but through the cycle and with regard to the question of resilience to and we have to live with years where banks do not earn their cost of capital and this is not a problem as long as it is not too long yeah and that's why we wanted to increase the resilience in banks for them to be able to withstand two or three years of how do you say that in English a drought you know what I mean tough times yeah and that's that's the whole regulation and reform agenda about yeah so that we should not forget it is rather the question of when you list the challenges you know and this was pretty much listed by by Jose Maria do you have the appropriate mitigating measures for the banks in a time period where they are still able to act and here you can see that European banks most of them yeah are on their way forward some are already there some are pretty you know close to their goal and some have to still do a little bit more of a homework yeah so I would not like to put all of the banks in one bucket I don't like that at all especially not when we are talking about 125 banking groups in 19 different countries with 19 different challenges yeah so we have two dozen banks which for many years already are very well on track and let me tell you they differ in size they come from different countries they have different business models they have different cost structures you know so it is not it is not the one business model which is the solution yeah and when we are talking about digitalization when we are talking about regulation which increases trust in banks which decreases funding cost yeah and when we are talking about low interest rate environment which is a challenge for longer period for the banks but which decrease funding cost yeah yeah this this all are challenges this all are different solutions you know cost structure better cost structure using digitalization using opportunities like the PSD to etc but it's not the one solution which fits to all but it is rather a kind of conglomerate of different matters no a merger should not be a taboo but they are also not a panacea you know it really depends on the individual case and to talk about it in general doesn't really answer the question when it really comes to the issue the way I look at it though is from a supervisory point of view in mathematics two times negative becomes positive doesn't work in banking no for sure not so you have to have a very complimentary set of banks and it may make a whole lot of sense especially in a Europeanized banking world but you have to go case by case and not I'm not gonna make a general suggestion and it's not on our mind to see more or less mergers it's for the market to decide do you think that different size of banks should need different approaches or rules or proportionality yes Sabina what do you think of that well proportionality yes and let me come back to the consolidating question because I did not answer I would love to see more consolidation in some of the markets we have some countries where we have quite a strong competition yeah and where you could think about you know having a stronger consolidation and we have markets where this is not the case but every merger we are talking about should make sense and there's another nice phrase in German saying two ugly ducks don't make a swamp yeah and so I mean what should come out of a merger is a better reliable a sound a viable bank with a bright future yeah and so this is the most important thing yeah on on on this issue of proportionality we were in a panel in the IMF or reproduced discussion over there I think that we have to be I mean careful with the discussion there there's room for proportionality greater proportionality no doubt but you have to be very careful I come from a country where non-sophisticated institutions who were created a massive problem for the country because suddenly you know they became you know the whole lot of them you know systemic for for the country so sometimes unsophisticated institutions can create very sophisticated problems second what once you need to decide you know what is proportionality we talk about a simplicity simplicity surcharge in the IMF meetings but for instance corporate governance well let's simplify corporate governance requirements really I mean that's a challenge in these small institutions in fact that was probably the basic problem that I saw in Spain in the crisis year so we can agree on the on the principle but we have to be extremely careful how we roll out this because it can be I mean a very very dangerous thing yeah there's a question from the honest about the risk culture that you mentioned before how would you evidence as a bank the right culture in terms of risk and even more difficult how do you get a true view as a supervisor first the bank well I think that the risk culture the culture of the bank actually is not only the risk culture staff and you know it is extremely important for employees but also for our clients not we show that one we are an institution which behaves properly so we can attract the right kind of employees and they can develop and blossom and two if we behave properly our clients are happy to do business with us and you know was meeting a client this week we said I'm going to do more business with you because the other bank I'm doing business they are a bit too arrogant and I think you're doing the right thing so you know the risk culture but the culture of the bank is not only about you know fancy stuff but it's about you know true business and true development which is extremely important he comes from the top from the board having the proper governance from the management applying to yourself what you asked to others when we you know we structured and transformed unique credit last year we took very tough actions in terms of formulation of the management starting with mine reduction of salary no bonus you know and that is extremely important and then we have a defined a certain number of key actions the five business principle which we use everywhere in the 14 banks where we are present you have panels in the entrance of the bank in all the meeting rooms about our five business principle people are evaluated along the lines of our business principle we give objective along the lines of five business principle when I make a presentation to the employee say what our five business principle you don't imagine how difficult it is for people to remember five business principle initially because you know what they say oh I don't know I need to look on internet say no you need to look at and you have to be very careful when I came to the bank and ask what are the values of them and say look on internet nobody use the values and values are something a little bit you know in the air the business principle today are very very concrete they are about client they're about our risk they're about synergy they're about people development and their execution discipline that the five business principle that the guardian angel with our team members is the attractivity of the bank for the employees the attractivity of bank for the client and it is extremely important for the regulator as well so for me it is one of the key issue that we develop in the bank so being a little bit well I mean it starts with an easy check and then it gets more difficult I have to admit yeah it starts with asking the bank what kind of risk appetite do you have and did you define it in written form and does everybody know in your bank what kind of risk you would like to take and what kind of risk you do not like to take that's the first thing then the next question is did you align your remuneration practice according to this risk appetite does it fit together or are they are contradicting incentive yeah the next question is for example do you talk and inform your board members your supervisory board if you have a two-tier system your non-executive directors diligently enough about the risk profile and the evolvement and the scenarios you are taking for your stress testing for example on time meaning that they have the time to look at it yeah do you have a discussion to your board meetings about it or is it just you know an item which moves through the agenda via an a point yeah and so you have some hooks as a supervisor where you can see whether there is a defined risk culture and whether this risk culture is taking into account in the daily working yeah but then you look at the relationship to capital of course exactly yes you have to I mean the the quantitative aspect comes in there but then comes the difficult part then comes the additional qualitative aspects what kind of a judgment do you have about the seriousness of the the assumptions taken by the banks with regard to their risk yeah and what kind of scenarios do they have they have a bad scenario and do they have mitigating factors etc then comes the capital again so this is then the more difficult part I think that as a board member one of the key things is how the risk committee works because if it works well and you you recognize it when you see some minutes you do have a very thorough view of the risk culture of the institution whether you have debates around risk appetite but if you connect that with with the resolution exercises or or the iCAP and iLab so the thing that you do understand how risks interact and not only financial risks so you do need to have a wider understanding of risk including cyber so things that that are not not that evident if you think in financial terms but I think that that if you have a well-functioning board and specifically risk committee it helps a lot because it gives a very strong sign out to the whole institution that this matters and and I think that's that's a very powerful instrument without for the board which is important is what are the indicators which are pushed by the management to the board and what are the indicators which are not brought by the management to the board because we manage the bank with a specific set of indicators some of them are qualitative some of them are quantitative and what I find extremely interesting all the time when I discuss with my team members and after all when I present to my board is what my team members do not tell me about how they steer their business and you know if you miss as a key indicator a specific risk angle which can be a non-financial indicator or financial one then you know that the you know the division is not working on it and I think for the board or for the managers looking at what is not looked at is actually more important than what is being looked at and it's always what I'm looking at and making sure that the board is aware what our priorities and what we're not really looking at because it's a second priority. Yeah just to mention something that I has been mentioned by you but I think that we need to raise awareness it's not just risk culture it's the culture of the bank the relationship of the bank with its clients basic you know rules that need to be you know in the mindset of the people at the top but also by the people of the bottom if we don't have in the banking industry the right culture the right banking culture the price that we are going to pay the price that we are paying is what we could call judiciary by judiciary randomness I mean that you know even we are not able ex ante to have the right culture that minimizes problems with our clients a judge will come out and later on you know we will be subject to further pressure probably uncontrollable and probably you know I'm fair in the sense that you know you end up not you know really identifying the rotten apples so it's extremely important it's not just about risk it's about having the right culture yeah but you mentioned culture and capital there's a question from the audience asking what's the sustainable cost of capital in your view it's more likely seven eight eleven percent word you see it doesn't it depend on the business and on the rest which is the same can I have a go I'm not a banker so probably I'm the one that can have a you know I go we have discussed that is definitely in the past if you remember it's a little bit bizarre because cost of capital was ten percent you know we have made bank safer you know after the crisis we have had a huge clean out and what is the cost of capital ten percent it's kind of it's stubborn then interest rates zero cost of capital ten percent it's kind of a puzzle probably we are in a transition phase but going forward I would expect cost of capital to be more commensurate with with where the rear their interest rate is where the real interest rate is and and more diverse depending on the business model of the bank if you have a volatile business model you will have probably you need to have a higher cost of capital but it's a little bit of a puzzle that we are stuck with this ten percent figure you know for for quite a quite a long time probably it's a transition where where the market is still perceived the banks are as risky as we transform and going forward we are able to convince that the market that probably for all business models you don't need a ten percent cost of capital any clues about why the cost of capital remain stable well I think that there is still a certain amount of uncertainty about the the forward-looking aspects of the business of banks yeah we talk about digitalization and new competitors yeah we talk about NPS we talk about the regulation which is not yet fixed and I think weighing this against the very low funding cost against more resilience in the banks more capital more liquidity better risk management better governance etc and the investors are not yet there in you know they did not digest fully so I agree with Rossé Maria please think it was mentioned it really depends of the business model we have 14 banks I mean 14 different countries the cost of capital of our bank in Russia is more or less twice the cost of capital of our bank in Germany so based on you know the business model and the cursor we have a you know different cost of capital so we never and we don't comment about what is our own cost of capital the market defines it so what we need to do is to make sure that the perception of investors is that such that they see our cost of capital is lower so what do we do we need to reduce the risk profile of our balance sheet and you know for us you know it is extremely important to keep reducing NPL in our balance sheet from time to time have reaction of some of my Italian colleagues about but why do you sell NPL to investors who are going to make money out of it and I say that because you know the profits that we might not make on our NPL our investors make it 20 times because our share price should go up because our risk profile is going down because our cost of capital goes down so you know we are simplifying our business model we make sure that our earnings are going to be more stable we have a clear explanation about the strategy we need to have recurring revenues recurring profit all the time so it's a long-term process in order to make sure that investors see the bank as you know having a stable revenue stream stable net income stream and the lower risk profile and it's only over time that the cost of capital can go down and it's a very important component today of the share price performance in the low gross environment well I think your colleagues are questioning you because you set a benchmark with the price of your operation it is a mixed issue as well we didn't send a benchmark or a price our large transaction was made of different asset class each asset class has a different provisioning level and the blended amount is the blended amount but it does not mean that all NPLs in Italy should trade at the average price where we traded our portfolio it can be completely different well we started at two I mean if you lose confidence in a crisis like we all experienced in 2008 it is not so easy to get these confidence back and you need to have a track record before the investors will come back with their confidence and this is why regulation is not only and supervision is not only cost but also has the other flip side of it which is a more stable more secure trust trusted banking system and I would say more regulation is better so if I say that my colleagues in the different banks are going to go after me but you know to a certain extent that was your career but I didn't tell you I send my resume to the ECB but you know more regulation is better not too much regulation those have been about you know more religion is better so that investors see that there is a you know consistency in the way banks can be managed and you know the risk profile of the banks he is going down and I would say today if we have less regulation in the US remains to be seen what's going to happen US banks might be seen as casino banking versus safely managed banking Europe that should benefit be beneficial for European banks yeah we started discussing sustainability of business model in a cycle which is in a nice recovery you said 2% is not that much but it's better than what it is much better than yeah and at the same time we know quality of easing will be and winning slowly starting next year how would you feel this will impact the both effects will impact your profitability your business plan the Mario Draghi this morning mentioned that the bankers can complain about low interest rate but they forget to say that there are some other benefits and clearly the cost of capital is going down and you know our clients are today start to invest again so you have always mitigating factor we communicated about the sensitivity of our revenues to short-term interest rate it's 170 million for 10 basis point when we have negative rates at minus 30% so you know three times 170 million is a lot of money you know our 20 billion revenues is not going to change the needle basically so I think that you know when we have a different policy from the CB you know the good news is maybe that interest will go back up is it going to change our profitability is going to improve it much better news it means that the economy is doing better so we should have more sustained revenues in terms of fees transaction banking financing fees our cost of free should remain lower so and that's a very good time when the situation is better to push for more transformation because that's you transform the bank and you change when you're not under threat if you you know when you're under threat you cannot change you are reactive and we need to be proactive when the environment is better and that's what we do at unique rates have been a lot like it well I mean if you transfer this and I fully agree to our push for reducing NPS you know this is exactly the reasoning we are in a growth period the recovery the economic recovery is solid it is broad based we have growth in 17 consecutive quarters if I remember correctly yeah the labor market is improving business investment is improving sentiment sentiment improving all the projections they were they were lower than than what happened in reality so now is the time now is the time to clean up and to use this room for manoeuvre in the best way in order to prepare you know for yeah a growing business activities there's also some concerned about that you know because their concerns is that pushing fire sales of assets will leave holes in the balance sheet of banks that will have to raise more capital and get weaker on the market yes but again I mean this is this is for me a view which is very narrow-minded on sales of NPLs the SSM very clearly said already two years ago asked governments already two years ago to exchange for example improve their legal and judicial system in order to help banks to do a quicker work out with their NPLs so we see this NPL issue in a very broad scale we addressed it with the March publication the stock I'm saying very clearly we want the banks to have individual targets we want to have strategies we want to see a good governance aligned remuneration for example a good incentive system to reduce NPLs we are now talking and consulting a paper for the new NPLs so that banks do know when we are assessing them on an individual basis what is the starting point for our assessment and then we do the individual part and and then and then and I think this is very important and then we need in parallel a better environment promoted by the governments and by private investors to to to deal with the NPLs to assure that banks can deal quicker with the NPLs and here some people still have to do their own work to be very clear it cannot be that we have in the euro area we have countries which do not need one year in order to do a work out and to repossess collateral and we have countries where you need on average 12 years well that is a difference you know yesterday your colleague in Yatsue Visco said whenever you tackle the NPLs with an action like that you have to keep in mind financial stability and value the impact of this did you make an analysis of the impact of the guidelines on the banks and the needs for more capital applying those guidelines well again in March we published qualitative aspects so an impact analysis on qualitative aspects is quite difficult to do when we are talking about the new NPLs yes we calculated an impact on with regard to the secured as well as the unsecured part with different phasing in and we will see what the consultation will bring for this new so you're hoping to change yes but let me be very clear to nobody nobody says that we push banks for selling their NPLs in the next year and to be cleaned up in the next year what we are saying is we need to have a plan yeah over several years in order to have a the the goal chief that at one point in the future yeah and the stock yeah and will be very much reduced as well as well new NPLs will be provisioned and conservatively no I don't want to comment on on the discussion on the supervisory board of the SSM but I would like to give you something to think about it happened at the very beginning of me being a banker which was like at the end of the 80s I remember JP Morgan coming out with a annual report saying we have written off 100% of our Latin American debt and five years later I met I joined JP Morgan and we talked about it and I said was that a smart move and they said we made more money on the new business we were able to extend after after written off you know that you need to be able to afford this of course but they were the first ones in there again could pick and choose and do the deals so this is something which we discussed a little bit earlier of being ahead of the curve if possible if you are ahead of the curve you may be selling when the market is not yet right and you may not have the best prices but you will able to pick and choose the sort of business strategically in a better way so it really depends on where you want to be and where you can be but clearly you have an advantage if you clean the deck early I can not agree more with you about cleaning up the deck this is what we did at unique credits and we can see the benefit this being said I fully agree with Ines your visco as well that we need to look at the impact on a country in terms of additional capital requirement if the measures are not faced improperly because then we might take a one-off impact which could prevent some of the banks to operate properly so I think what is very important is to set the direction of travel and the target enough rules to have you know the proper path to go to the target and you know from time to time you know it might be important to you know move a little bit less quickly but to be very firm of where we want to be but not take only one regulation but all the regulation and that for me extremely important we speak about for instance the calendar provisioning which is the topic which is covered but it's not only about calendar provisioning it's about EBA guidelines which are being pushed it's about IFRS 9 and it's about Basel 4 Basel 3 when you combine everything you know we you need to have a look at what are the relative impacts because if you just sum up you know the absolute impact one by one the additional capital requirement is huge so you have to see how it compensates what is the proper way to move into that what can be the mitigating factor and the regulator as well can work with us in order to develop the mitigating factor the transposition if European laws or some of you know the rules for instance on Basel 4 not to make sure that what we do makes sense both from a regulatory point of view but also from a macro-pudential point of view in a specific countries and I think it's finding the right balance which is important and you know in yesterday's quiz right Mr. Donbret is right and you know it's you know just for each bank or each country there's a different solution let's be careful that the cursor is put at the right level. What I heard of this discussion we Europeans we are very bad at marketing Paul was offering us the view from Harvard on this issue of non-performing laws which is very negative of course we create a lot of noise and then you know people from outside Europe do not understand what is going on but we are making huge progress here here you have here you have two banks that have made you know incredible transactions in the non-performing laws is fear there was two examples here of course we are making progress of course we are moving forward and all this noise we create every time we need to discuss something it's so negative for for the view of European eurozone banks outside you know the eurozone that we should be doing better frankly speaking because it's a pity we are doing a lot of progress. I was thinking exactly that because in our case we need a deal of 30 billion deal which was large and if you think in terms of Spain Spain has has gone through a phase where we have developed a servicing industry that we didn't have and that helps a lot when dealing with NPLs because all of a sudden you create sources of additional liquidity so I think that that is something that was not there five years ago and it's there and it's helping the whole the Spanish financial system so I think that that we we should have a balanced view I think. Yeah and let me ask my very final question because we have to wrap it up a bit and Andreas Dombret you said recently one space of three is finalized we should take a short break and look at any intended consequences and whether the news rules are impacting in the right or wrong way so should we prepare to time out something as they call it I have to be very careful now with my answer otherwise I can't go back to the Basel committee but but I really mean that when you finalize something the message is in the word then it is for at least for a certain period of time you should sit back and reflect on where you are and where you want to go and we are doing too many things at the same time we need to finalize Basel 3 we cannot live with this variability of risk-weighted assets we cannot live with this two different systems I am not predicting but I'm very relaxed so maybe I'm not close but I'm relaxed about that we get this done in it so but we need to take another time out we need to reflect on on in regulation and look at the entirety and all those implications some of which are unintended and we cannot go on forever regulating I fully agree with on that one but I think what will be extremely important after Basel 3 but the ABA guidelines after S90 that you know we have certainty for investors for a certain period of time because our investors are providing us with capital equity or with debt they need to know exactly what will be the capital requirement for banks and at this stage we don't know we don't know how Basel 4 is going to be implementing what what will be the Basel 4 agreement what will be the transcription into European laws the ABA has published some guidelines we need to have visibility we need to look at how it's going to interact and what could be the mitigating factor between them so I think I fully subscribe to the point is we should pause and give investors the proper visibility that will be in favor of the European banks just to be able to attract the proper capital from long-term investors Sabine and Lutin-Schlaget Well I mean for sure we should close now the Basel reform agenda with hopefully successful finish with Basel 3 and then we should start implementing and I mean even as a lawyer I'm a little bit exhausted with regard to creating new rules I would like to implement and work with them now and I agree with with Andreas too that you always have to reflect and the FSB has an own topic there evaluation of the overall framework and whether it fits together and I think this is a good starting point to do it now yeah but but overall now I think we are finished after 10 years of reform agenda and now we work with it All right I think this was a conclusion so thanks so much to everyone for attending and a round of applause to our panelists today thank you if the stage let me just thank everybody for attending so we're coming to the end of the conference thank you to the audience and for participating being engaged and staying here all day