Thank you First of all, thank you very much for Organizing this forum and for giving me the opportunity to participate in the panel Congratulations to the SSM on their fifth birthday. That's almost young adult by now I've been asked to put forward, you know a few ideas That may motivate the discussion for the panel or what the future of regulation Is holds for the banking sector? I'm delighted to do that and flutter and I appreciate the opportunity, you know I should know the main task of the ABA is to contribute to the creation of the European single rulebook in banking You know by single rulebook We mean a single set as Andrea was just mentioned of harmonized potential rules for financial institutions throughout the European Union You know, hopefully that will help create a level playing field provide adequate protection for for the positors investors and consumers and foster competition Now since 2011 the ABA has actively contributed many areas of this potential regulation into more harmonization rules across the EU where NPS have been mentioned internal Models as well in the dream project of the ECB is another area of attention But there are many other areas, you know So what I would like to quickly discuss is what are the main issues that we see going forward in the regulation in the rhetoric framework Over the next year year and a half. Well, hopefully that will be A basis for for a discussion later in the panel now before that I think that I can make a very quick assessment of what the overall perception of the situation of the banking industry is right now over The last few years has been mentioned already by the vice president of the ECB and and by Andrea chair of the SSM in High-degree, you know banks have managed to significantly enhance their capital position You know correct with the tier one ratios have gone up from 9% of the crisis to about 14.6% today As a quality has improved. There's been tremendous progress on MPL's You know the MPL ratio has is now 3% you know compares to about double that 6.5% in 2014 No significant reduction. They still work that needs to be done in that area and both not just on the stock of MPL's But don't make sure that the flow of MPL's or future MPL's is adequate So on that far we have put forward for instance some low origination guidelines You know that are under consultation right now Which hopefully will help in making sure that that the adequate flow of new business comes in So that the adequate flow of new MPL's will also come out at some point in the future Which I'm sure will arise as the cycle moves along You know similar to capital ratios as was also mentioned before liquidity has also increased the LCI rationalize about 150% in the union That's the figure out higher than before. However, you know This has also been mentioned their challenges in the industry and the most obvious challenges profitability It's been low for a number of years Persistently low below the cost of equity on average for the industry and that's a significant challenge You know furthermore this challenge on the return on equity seems to be relatively unique for European banks It's not the same challenge that happens in other parts of the world particularly in the US or Asia We look at the behavior of other banks So there are specificities in the US in the in the European Union that needs to be Addressed this difference likely not to be attributed to a single cause You know macro economic conditions the impacts of monetary policy Competition for newcomers from technology the need for technical transformation investment by banks probably excess capacity Was mentioned lack of ability of concentration and orderly restructuring in the industry Those are explanations that have been suggested But we need to make sure and be honest as well that uncertainty around regulation and Supervisory expectations in the European Union is another one of the reasons I often mentioned so in this panel I hope that we can Provide a little bit more clarity at least so as to reduce the uncertainty You know not talk, but we can discuss about the level but hopefully the panel will help to reduce the uncertainty So let me talk about a few topics that I think are in the agenda going forward And that we probably discuss First finalization of Basel 3 You know the finalization of Basel 3. I think the key word here is finalization You know finalization of Basel 3. It's clearly in the agenda You know we have been discussing this for many years This has been a major improvement in the regulatory potential supervisory environment of worldwide banks It has helped the whole Basel 3 process to rebuild trust and rebuild the economic recovery for the last 10 years And we need to finish that you know the new Basel standards that have been approved the last part You know the managed to maintain resistivity in the new standardize approach that was an important condition for European banking industry and That was No need to be honest that was maintained with a difficult compromise Which was on the problem on the start of the output floor as well on the space That was a difficult compromise But it's important to keep in mind that it's an important part of the whole package for that compromise now We issue in July of this year the ABA after request from the European Commission for a call for advice We issue our policy recommendations and our quantitative but assess many of these areas You know I will not go into the detail but just on the policy recommendations You know I would like to make three so like general remarks the first one is that you know It is important to ensure from the perspective of the ABA that EU implement is in full These pockets of Basel 3, you know and above any material deviations You know the reforms have to use as a more recent activity was an EU important priority keeps Harmonized set of rules at the global standard with facilitates global financial flows Facilitates global banking facilitates global trust coming back to the end of Andrea's speech. I think that's very important But to facilitate that also international coordination is necessary to ensure this will implementation so we also be you know aware and Concern about possible not full implementations in other parts of the world because you know and Unilateral implementation by any jurisdiction will not provide a level playing field will not provide trust in the global level And that's an important constraint. So keeping an eye on what's being implemented knowledge jurisdiction. So it's important Finally, the third general point, you know is that as we assess the impact and finalization of Basel 3 And this comes back to the message that was sent by the vice chair also in the speech earlier today We need to have a full assessment of how the implementation of Basel 3 enters into our current overall capital requirements and functioning of the different capital Buffers and capital constraints that we put on banks, you know, and particularly to the standard now we do have Certain parts of the regulatory framework that are being in place at a certain level to try to counteract with some of the weaknesses the Basel 3 is supposed to Help fix, you know, we should recalibrate those to the extent possible Now in terms of the quantitative assessment, you know, we have forward with a number that was 24.4 percent increase in average capital requirements, you know two comments on this, you know This number seems large and it's not small, you know But first it's not homogeneous across the union is focused on it's it's concentrated a small set of large banks Tends to be highly correlated with the use of internal models by banks Which is that surprising even that that was one of the targets of Basel 3 second more important This is clear to be a conservative estimate an upper bound because it's calculated under a number of assumptions all of them in the Direction, you know of likely bias in this number of words more important The assumptions are the remaining of the status quo the banks balance sheets remain as they are today And they made the assessment without thinking about how would they react to the implementation of the rules also the existing capital requirements across all the other areas of Regulation also remain the way they are right now and they will not readjust as I said before, you know To take into account the introduction of Basel now Basel the intact assessment is not fully yet finished We need to provide information on market risk on the final modifications of markers and CBA And also the ECB has been working on the macroeconomic assessment of the bit on the measure as you can expect the macroeconomic Assessment would probably come forward with the idea that there are short-term costs But the short-term costs are compensated with higher Expectation of more stability over the long term and potentially higher output growth or at least less severe downturns in the economy now in terms of other areas of regulation that we have gone forward, you know We have from our perspective the implementation of the risk reduction packets. That was approved in the earlier this summer That's a very important part to package But as I said, I think the important part is the implementation We are the implementation stage we have for the ABA applies a huge amount of work We have over a hundred Mondays that we need to deliver upon over the next three or four years But they're implemented in the basic rules of regulation or in the risk reduction packets And they're already do you know we hope and we will come forward over the next month With a number of roadmaps trying to explain how we are condoing come forward with all these technical standards and other regulatory requirements that there are Put for in the legislation to try to provide some clarity to the industry where this is going But again, this is the implementation phase. It's not the new design phase Additional to that. I think that we need to have more information on how We are going to continue our recalibration and predictability on the application of the rules And here I go back to the statement that was made by the area earlier today I think that's been important to provide transparency and predictability to markets to investors to the banks themselves how that Rules are being applied how the consistency of the different buffers are being applied and at the same time How is the robustness on those existing regulations there a CBA? We have a clear Monday, which is the stress test exercises that we perform on the industry every two years We prefer the stress test next year, but as we go forward, you know, and I think this will know we are reassessing how to best redesign the stress test so as to build into better Providing information and clarity to markets both on transparency or robustness and then supervisory measures and application for banks I think that's an important idea going forward that hope will reduce also uncertainty Then finally, I would like to point to two more areas. I'll fix my remarks technological change Then you get changing the industry is coming is happening and regulation is to be up to the task of the challenges that that Technological change puts forward We have made a lot of progress on payments for instance with the PSD to directive, you know But there are other areas of technological innovation for instance the application of artificial intelligence technology or The transfers of risk across the value added change to other parts of the industry that they may not be banks and adequate management of those risks It's an important aspect of Regulation going forward. We have put forward some guidelines on Outsourcing that will help provide clarity on that area But that's we also point for instance the potential concentration risks that that's outsourced is taking place To a number of very few players in certain parts of the IT industry that may lead to potential additional Risk or new risk that we're not aware of Finally enhanced consumer protection data usage cyber risk and crime prevention Those are I think for broad areas that I like to bring forward to the agenda I think they're all in our agenda I would like to highlight those four together because of one major characteristic that I think is different from the previous ones Which is that for the previous ones? We had a long tradition of international collaboration international coordination international forum through Basel The FSB the G20 to try to get coordination at the global level and at the European level in those aspects in these areas We're behind You know in the areas of AML crime prevention in areas of data protection data coverage You know we need to build that because the essence of the technological changes are the essence of the programs that will arise here Are likely to be cross border So let me stop here. Thank you for the opportunity to look for I hope this has raised some interesting issues for the discussion Thank you. Thank you chair Kampa Well, that's really plenty to discuss and every single point would be worthy a discussion It would take a marathon, but let me start with this We we heard this morning chair and we are saying SSM and Implementation regulation is not a nightland. It's a project. It takes dialogue and also with different level Only bigger send you're working also on a public consultation on the implementation of Basel 3 Where are we and what's your point of view on the direction? We are heading to in terms of the future of regulation and implementation in Europe, especially after the approval of the banking package Yeah, thank you Well, let's start with the banking package and then let's move to Because it's an important achievement. I mean the the the banking package that we've just agreed We no need to roll it over and implement it. There's number of of Very important points. I'd like to underline here Well, first of all, I Repeated some sorry. I'm boring, but we are in a far better place than we were 10 years ago And I take all responsibility for having proposed. I think all banking regulations since 2010 Each time my friends in the banking industry told me that this time you kill us Well, the banks will not be able to land anymore. Well, guess what? They're still there. They're still land I don't mean to say I mean there are a number of challenges and actually maybe the environment today is more challenging than ever But when you shout very loud all the time the risk is that the time you have a real problem You're not listened to anymore Okay, I close the brackets the So the main positive impact of all this and the last banking package on the finalization of Basel three that is to come is really a huge Amount of prediction of the risks in the system. So we have a financial system and the banking system That is far more stable far better capitalized Far more resilient than it was 10 years ago That I think is is excellent news because the times to come and not necessarily going to be a walk in the park So that's that's my main takeaway and the measures like the leverage ratio the NSF air but also the rolling over of T-LAC and the building of ephemeral Which is still things that are in the making and part of the last package other have a big role to to play in order to to finish Compliment this architecture at the same time we are of course trying to put forward also measures that Enhanced the ability of banks to finance the economy and we're not always Will sometimes criticize on this mostly by your friends in the supervisory community because it's not It's not how to put it Autodox enough and CR 2 for example As improve or will improve the capacity notably to lend to SMEs and fund high-quality infrastructure And if you have listened to Valdez Dombrovsky's speech to the parliament for his confirmatory hearing You'll see that he is not ashamed about this and he intends to continue on that path. Of course, we should be careful I mean potential regulation is primarily about giving risk risk signals and We should not Trouble this risk signal too much but still and they're coming forward going into Financing green which is going to be a huge Challenge in the years to come. I think we need to to have a collective thinking about how to do better The second important dimension is proportionality Rules have been made more proportionate and that goes both ways They've been made more difficult for big and complex banks And I think that's that's right in particular those that heavily rely on internal models and that that will Continue with the with the next package that is to come I come to this in a moment But I've also been made Less complex for less complex banks not only in terms of of reporting and I think that is that is welcome. There is I want to be clear. There is a lot of inbuilt proportionality when I see Visitors from that are heading small banks and they Complain about the output floors. My first question is always Why are you concerned? Because if you have an issue with output floors with your business model Then we need to talk because I have a problem In principle with a simple business model retail bank Most of the additional complexities are not for you. You do not rely on internal models You're not concerned by output floors.  So there is a lot that is inbuilt in the package Third we've been trying to improve the governance and supervision of banks amongst others with clarifications of the PLA to framework And the requirement for foreign banks whose last activities in the EU to establish what we called in intermediate parent undertaking in the EU in order to be better supervised and Also to enhance their reservability So I think all these are very important Achievements, I'd like to mention one other point before coming to the next package and that is NPLs I mean Andrea mentioned it's I mean a very important feature is Pillar one measures that have been put forward by the Commission the pillar two measures that have been undertaken by the SSM in this respect and all these are on the back of a relatively favorable macroeconomic conditions led to a marked diminution of the stock of NPLs in the European Union, but also in the in the banking Union Yet and despite the measures we've been taken in order to avoid that the stock rebuilds We all know that this is very sensitive to Prevailing macroeconomic conditions. So if we have a recession We'll need to be very alert to not let the stock of NPLs rebuild But I think that is that is a very good news that we started to tackle very seriously and with success The issue of asset valuation A word now on the future we have published We have started the publication under We are I mean inviting all of you to Comment on the finalization of Basel 3. I never say Basel 3.5 or the Basel 4. It's still Basel 3 It will be important. I mean Jose Manuel Said it so I will not insist We do not believe in the European Commission that the Impact on capital requirements for bank will be of the magnitude established by EBA Because I mean I'm very cautious and that's reason why I'm a functioner I'm a technocrat otherwise it would be in the private sector He's even more cautious than that's reason why among technocrats is a supervisor. So So the EBS taken all the most conservative assumption Including coming back on existing Deviation of Basel in the existing framework, which I'm not sure the co-legislators intend to do So we we don't expect the impact to be of this magnitude So you're not by the number like 135 billion of capital shortfall we shall see first of all We shall see what the Commission will propose and that will be informed by the impact assessment and the impact assessment will be Deeply informed by the public consultation that is ongoing. That's why it's important to contribute and More importantly and maybe I think that is worth saying As Jose Manuel said it this agreement is a result of a very difficult negotiation in Basel Andrea and I were sitting side-by-side in in the G-hosts for some of these battles And in the end of the day we settled for something that is not what we wanted Not either was others around the table wanted, but it's the compromise we found And you know, this is a repeated game So there is it's pointless to agree on something on Basel and do something completely different when you're back home Because next time you meet your colleagues in Basel say well, I mean, why are we discussing here? So as far as the EU is concerned, we will faithfully implement the agreement we struck Well, let me move to if marriage with this because Olivier Gersens told us at the very beginning We are in a very better place of versus 10 years ago The banks are still there they survived, but at the same time, you know, we are market guys We look at banks also from a market perspective and the valuation in Europe of banks are Historically very low if for all the parameters and Andrea has told us this morning It's not the SSM or a regulation to blame but at the same time uncertainty about the future of capital requirements and so on He's weighing on the banks and yes, they're alive, but they're not feeling so well at least in Europe But would you make of that and how do you respond also to Olivier Gersens on the future of base of free and the finalization? well first of all If you expect me to have major disagreements with the previous speaker I think I must disappoint you Because we have spent all our energy so the last 10 years from every perspective the monetary policy perspective financial stability perspective perspective of supervision perspective of oversight regulation and We have been working very closely together Not only at the European level, but at the global level in order to achieve a common response Because those who put now into question this effort I think They put into questions their responsibility in stoking the most important crisis for our democracies that existed since 70 years and And Let's not forget that we have at least in the public sector, but I also believe In the private sector at least those who are good face That we cannot go back to the voter with such destabilizing behavior as we have seen before the crisis So I'm all in favor of continued dialogue looking forward in the area of Implementation, but I am absolutely opposed to put into question the effort that we have done jointly Together with a private sector. There were numerous Consultation in order to achieve what is now on the table So that is my first takeaway second Can I translate that the package has to be approved as it is or if package is not negotiable anymore We have already we see that the level of commitment at the international level Is beginning to get more fragile and we should resist this We should stand at least as European firmly for a multilateral international environment for international cooperation in activities which are International by definition and where the profitability that you that you mentioned is usually Depending on scale and scale cannot be achieved in a closely national environment So that is one point where I would never less since you want me to disagree I Would disagree on one point with Olivier that he's money says the banks are still there if at the end of the process We would have the same banks with the same size and the same business models in 27 or 28 as we had in 28 then we would have a market economy that is not functioning What has not functioned so far is the exit of the market Especially I would say in Europe where we are certainly Experience that some of the exit is not functioning because it was protected at the national level and It has prevented the rejuvenation with new entrance and we see now the new entrance are coming from outside the banks maybe because we have given too much protection to the insiders and We need certainly a new landscape for banking and We only hope that this will be achieved through the new package also through a Cautious prudent prudent approach over time and that's why we have such a long transition period and We ask everyone to take advantage of transition period to adjust But adjustment is needed and will have to come and we will not compromise on this need for adjustment Let me say this and then the second point. Yes The main package is behind us what we are discussing in the future is implementation implementation there is still some scope of small adjustments but then there is a third stage and That is the evaluation After we have implemented and I accept that not all what would have been implemented might have the same Results that we expected them and then we have to recalibrate down the road And I think that is also fair and it's only normal in the functioning society So but let's please make the distinction of what is behind us this package is non-negotiable What lies ahead of us that is implementation and this is small adjustments that could be done whether we have for example the Now the output floor being applied at the level of the highest Consolidation or at every level of consolidation. I think we are still ready to To quarrel a little bit among us on this but this is not putting into question the principle Then we will have new challenges because society evolves and Olivier has mentioned some of the new challenges Where we also have to adjust but this is not something that is invented By the regulators or invented by the supervisors in order to torture the poor banks This is something where we have to recognize together that society evolves the requirements of the society Also are changing and we have to adjust to it. So I think that is normal as well. I will not maybe at this stage Go back on some of the papers that calculate disastrous results Because when it comes to statistics, I'm all ready to have a good fight But this should not distort us from having our common goal and be very clear What we need to do is implementation now and after implementation assessment and evaluation and I would rather at this moment Leave it with this high-level statement. All right get back to you a little bit later Claire What would you make of you know the playing level field that everyone is asking especially when it comes to the presence of American and global banks in Europe having seen that also lately and especially after the Trump election the push towards the regulation and the needs in the requirements in the US is apparently Growing and what's your perspective on the discussion today? Well, well, thank you. And wow. Thank you for inviting me here today I wanted to say happy birthday to the SSM because I think the progress in five years is considerable But I thought I also in light of what we've all been talking about give a nod to Mary Curie who I often think You know She one of the most famous quotes that she made was the weight of progress is neither swift nor easy and I think that all that we've been highlighting in the discussions so far and it's not quite well just 12 o'clock It just shows just how much progress has been made And I think about our own sort of capital and liquidity journey and the progress that we have made around capital Requirements liquidity requirements Really understanding all of the risks in our portfolios Considerable progress has been made We can talk about finalization of Basel 3 Sorry, the industry likes to refer to it as Basel 4 because there's a there's a lot of new stuff in there there's there's new things around the capital buffers that were were put in have been put in place and There've been updates obviously to definitions around capital etc which all of the banks who are operating in global markets have to absorb and incorporate and And I think it's fair to say and we've all acknowledged That the status of implementation has been varied across jurisdictions and when you get a varied timetable There's bound to be some slight differences in in the rules And of course that means that you know if you're operating a bank in global markets these there's very big Sensitivity to these small Definitional differences for example even around and even I have spoken about this in the past You know pillar 2 if you you think about how the capital stack for a UK Regulated bank versus an EU regulated bank. There are you know nuances and differences around that capital stack and pillar 2 that Do create some differences? so, you know there will there will be slight nuance and variations and differences and Yes, the industry is is concerned about the cumulative impact of you know the ongoing changes for sure And but I think what's reassuring is to hear that policymakers and regulators are focused on that and And you know in the words of vice chairman crawls of the Federal Reserve in his capacity of the FSB The the priority to focus and take stock and look at you know What's been the impact of all of this regulatory reform? I think he's very encouraging for the banking industry well Jose Maria all done Would you to compare SSM with Marie Curie and the breakthrough that she made in science in terms of you know The benefits that for all the humanity it had because we were together in the same panel two years ago on the title of the Panel was sustainable business Yeah, that's a good point Let me start a little bit with an upbeat note, okay We talk about in years Well, I mean banks are basically the positive taking institution that embarking maternity transformation and Now this is not a good business to be at for structural reasons the man is not this strong and we have a negative yields Flat yield curve is still the banks are standing up We are standing up we are alive and we continue to be the main Financer of the european economy and european SME so We have managed, okay Profitability, it's true. That is not yet there, but it's improving and it's positive And guys come on. I mean return on equity is return divided by equity you multiply equity by three Return on equity is going to go to one third what it was So it's natural that with this regulatory push for higher capital and higher quality capital Return on equity suffering. It's just normal, but it's improving It's not yet there, but it's improving and that's very important on on regulation We have survived our regulatory tsunami. I think that expression was mine when I was at the other side We have survived our regulatory tsunami So we have been able to adapt to a totally different landscape much more complex much more Instringent and and we are doing it. Oh, it's still we have leftovers like basel four By the way, if you don't like the term basel four Stop being irritated by the term and we will stop using it. That's the purpose of the That's the purpose of the term So we still have basel four, but but most of it it's it's done and banks are embracing transformation in which areas In terms of culture it's challenging Recovering trust is challenging, but we are embracing transformation in banking culture We're embracing transformation in the digital sphere Where we are being able to be up to the challenge that is being posed by by the fintech world And we are embracing the esg revolution so well, I think that The environment for banks have changed a lot And we are being able to survive to this to this situation on the not so positives Well, I mean the first one is that return on equity is below the cost of capital And here we concentrate on roe, but I think that really the question is why cost of capital is Fixed at that 10% since you know it looks like a cosmological constant You know everything has changed but cost of capital is still the same Market is still perceived the banking sector as risky and we have to wonder why if Obviously we have made the banking sector Safer and I think that it has to do with yes profitability not yet being there But also uncertainty on capital requirements And by uncertainty on what capital requirements. I'm not talking about regulation What I'm talking about is about the fact of capital requirements Regulation minimum common equity tier one is seven percent The reality is that the banks are operating with close to 12 percent common equity tier one This is what the market is looking at. They are not looking at the minimum bustle Bustle three ratio. They are looking at what on practice is being required By regulators and here it's important to dispel uncertainty. I think it's extremely important through transparency We still have some way to go because we still have I mean Bustle three finalization. I will concede the terminology But but I think that that's the problem market is still perceived the banking sector as not safe because of the fear of delusion because of the fear of Higher capital requirements down the road And and and we need to tackle that. Yeah, Jose Manuel Campa. Let's get back to this crucial point Which is uncertainty about the future of capital requirement on one hand It's not just regulatory based as Jose was done was saying but then The regulator are pushing for more consolidation in the system and we heard today the structural adjustment Is not going as far and as fast as the ECB is expecting But one of the reasons speaking with bankers to be living in the market is that any time An operation is just projected then there's a lot of uncertainty about what capital requirements will be attached to that And yes, Andrea today told us we've been misunderstood. We'll be more transparent We'll evaluate every business plan in the median term and give an individual response But at the same time, you know the living proof of what happened in the past are still there And so shareholders are concerned and managers are concerned. What's your response on this? Well, I think that we have all agreed that the implementation is key and implementation has two components implementation of the rules And then the actual application of the rules by supervisors and markets and a good understanding how those Rules are being implemented by banks and supervised by authorities. So that's that's right I mean now you point to one particular rule, which is how do we implement the rules in the process of M&A? It's I mean, I think Andrea made some remarks earlier in that process I think that that's For me a little bit of a puzzle to be honest because I don't think that for Many cases the situation has been that we don't have That the banks put forward what looks like a good business model and a potential integrating transaction And then they are not sure about what the rules will be implemented on that business model It seems to me that more likely than not is that the business model may not be there And we hear a lot of complaints about the business model may not be there And I also want to bring into this debate. There's not all about m&a's and I think east was clear here as well There's also a lot about orderly exit what we need is creative destruction We need the good banks to grow to do perform better services in the european banking union to take on the bad banks And take them on either by merging acquiring or exiting them out of the market That's that's a healthy market. And I think that's the process of creative destruction That needs to be facilitated. It's not just about, you know, whether mergers mergers one way of that creative destruction But orderly exit, you know being able to facilitate entry into new markets by good banks or Gaining market share by existing banks in existing markets. Those are processes that need to be more dynamic I think and clarity of how those Processes are operating within the union. I think it's much more important that the potential regulatory uncertainty that's underpinning some what could be like large symbolic cross-border or supranational mergers in the banking union in the EU If merch would you make of that? Is there any way SSM or ECB in general can create a more attractive environment for banks to merge and to Accelerate in the structural adjustment that was asked again today I think we should clearly not mix up the difficult environment The origins of the difficult environment for banking today and it's not coming only from Monetary policy low interest rate for longer time It is not only coming from the implementation of the basal framework It is also coming from competitive pressures that are stemming from regular from technological developments and I can only tell you if regulation is only good for protecting incumbents We will not serve our market economy. I think The banks have also a role to play to live up to these competitive challenges But what is the real problem Is I still believe that consolidation to some extent is being prevented by an excessive reliance on national legislation which provides protection And as long as some banks which want to consolidate cross-border Will have to face different tax regimes or double counting cross-border when they want to move together when you have Insolvency procedures which are also still largely Mutually excluding cross-border and where you have clawbacks, for example, which can in all Decisions that are being taken if you have Maybe a higher capital requirements in some cases I think we should discuss it Because we should not and I asked yesterday in an internal discussion inside the ECB that We have so many new areas green finance Proportionality everyone should not be running behind the football All together It's better that you have a strategic approach and that each is bringing in to the team what he can do best and I think What is needed that we also establish all the barriers that are now being preventing a european integration because of the present national legislation And we still have in many areas excessive national legislation which are mutually excluding european integration And I want to have a list of all of these areas and then I think together with commission And eba and other regulators we can see what could be done in order to diminish this excessive We have that was a price to pay to move forward in many cases A directive would it not in some cases be better to move to the regulation? Would it not be better in some cases to review also the enormous numbers of still existing national options and discretion if I see for example, I take the The concentration which where you can have an option to exempt certain areas from this excessive concentration rule and 11 member states have made Use of this national option and discretion, of course This is an unlevel playing field And everything which is unlevel is also preventing consolidation cross border. So I think Rather than running behind the big themes where the leaders, of course, they have to do that They have to adjust our societies to new requirements. But in the meantime, we are also I think having a duty to look at the nitty gritty detail that prevents the real thing to happen Yeah, we know devil is in the detail and from that point of view But just a quick one on this because you said before there's an evolution of resolution in society There's also an evolution in the economy. We know that the economy is slowing down Some are concerned about a downturn Now you probably on the stage are one the one that knows better the two sides of the story Monetary policy you're in good of government council on one hand pushing With every tools possible to sustain the economy in europe on the other hand Regulation some sees that, you know tight regulation we've lose money do not accord There's a transmission problem in terms of the effect of the monetary policy in the real economy because Regulation and all the what we're talking about is preventing the ability of banks to Give oxygen to land to the real economy What you make of that? Well, this is of course the question. I hope that would avoid But it is true that there can be inherent tension But what is important is as In each function you pursue the objectives that is assigned to you and that is very clearly assigned And if even the court of justice has said inside the commission there have been court cases where there are also conflicts of interest Inside the commission the court says no, that's not important if each pursues the objective Of the regulation for which the regulation has been made Then the you internalize to some extent also those tensions and the same goes for monetary policy monetary policy has one objective price stability We will pursue it when we then have issues of financial stability We should attack it from the financial stability point of view with the instruments that exist Of course here we have then again a tension between What has been brought up at the so-called federal level and what is still at the national level Macro prudential still being Primarily a national tool And but that brings about the question. Do we want to equalize the cycle throughout all the currency area? I think that is not possible because the structures of our economies are not the same So it's inevitable that we react differently to different shocks You see now The shock that we experience right now is affecting one country A little bit more than other countries because of its different Economic structures. That's why germany is feeling the maturing cycle more on the maturing side While the others feel it more on the cycle side Oh, I guess and would you make of that? What's your sense? I have in my introductory remark. I got you the right side of the 2019 package The not so bright side is that the commission that they initially proposed to get rid of a number of Options and discretions from member states to segregate liquidity and capital And the sad truth is that the result after the council has Taken care of it is that it's worse than before Because we have a problem in a very big problem in the EU at the moment and the banking union and that is lack of trust so people that used to be host Still believe they're host And there is no no such thing as home and host in the in the banking union at least We're all home and host of our banking sector, but the the member states are not yet there and The the result is that the ability for individual member states to Force subsidiaries of banks to segregate capital and liquidity in that member states Has increased and not decreased and that's the negation Of the banking union that's that's preventing banks from benefiting from one of the major Benefits of having a single market And to give you just an example where it's even worse in the area of m rel We Have a legislation now that forces a prepositioning ratio of a hundred Where the international standard 40 like is 70 And To tell you a small anecdote some some months ago. I had a phone conversation with randy calls And they told me well look i mean it's ridiculous And I why don't we all Lower down our prepositioning to 70 To give a bit of oxygen in the system. So well randy, I agree with you But you will be surprised to know that we don't put a hundred just to upset the americans We have put a hundred because this was an issue among our own member states And that's why my ability to decrease it vis-a-vis the us is zero So it's completely ridiculous Frankly and that of course prevents cross-border consolidation Because I don't think a husbandial cross-border consolidation is is trivial. I think we need both When it's I mean in this country for example, there is clear that there is to be a national consolidation as well But we need cross-border consolidations because we need our banks to be able like Any other company to take advantage of the single market For the time being for a number of reasons they are they cannot take full advantage or not at all sometimes of of having a single market and And for me that is that is a clear Goal, but at the same time The the the the prevailing political conditions are clearly not met for this and the second thing is indeed exit Because not everything will be will be sold through consolidation I mean the restructure the restructuring of the banking sector in in Europe it is clear that with the current Conditions, I mean you mentioned digitization Low rate doesn't help I cannot see how you can Be profitable Or actually not be loss making if you're a small traditional business model bank You need to be to to become a bigger traditional Business model bank Because maybe the low rates will stop at some point, but the impact of digitization will not Uh in any case so and part of the issue will be exit some of these banks will need to exit the market And this is something the americans are quite good at doing and we are very very bad I mean having even a Super small bank exiting the market. It's a big drama in any member state and actually The member states that are usually teaching lessons to all the others about how rigorous you should be Once it's a problem at home. They're just like everybody else. Do you have any idea how to fix it? Well, that's that's a very big political problem. So I think that as any cultural problem it takes more time and You know in this case before the culture Has changed in member states will not be able to pass a law And even when we will have passed the law it will be still sometime before it is actually Implemented I mean if you look how BRD has been implemented for example so far It is clear that I mean we needed to have Culture to mature before we could have something like BRD And I think we will need a bit more maturation because before we can have An actually an actual implementation that is faithful to the original intent Claire given the combination of regulation and economic cycles Do you think that in the future the only business model working and sustainable for a bank will be Yours in terms of the global bank of huge banks with this kind of scale And all the rest will have to struggle, you know with negative interest rates and digital competition And the weakening of the economy. I mean certainly the impacts of technology and digitization and different players come in To the you know banking market and financial services You know as I look at you know our forward calendar of you know investments, etc You absolutely have to have a business model that produces scale in order to be able to To fund all of these infrastructure projects and ongoing implementation and evolution of the business So it does seem that but there's got to be some sort of balance.  There's got to be a place for you know a mix of players to Ensure that you've got really good competition Yeah, Jose Maria Rodin in the end be frank. What do you expect from regulators and the ssm looking ahead? First of all the first message I would like to to convey is that we are not all the same In spain we went from 45 savings banks and banks to 13 You know the consolidation has been so brutal. I have a board Table in the spanish banking association 30 years old We had to cut it in pieces because it would not fit anymore and when we meet it feels very lonely So of course there are countries that have made progress in terms of consolidation That's the first message second message We are in an increasing returns to scale industry And we cannot deny that The environment the interest rate environment the business environment the digital revolution the environmental revolution Let's not forget that it's going to increase that tendency towards increasing return to scale. So Consolidate consolidation if euro wants to play a role, you know in the future is going to be of the essence Big spanish banks big european banks it expenses five billion euros per year. That's a lot. That's a lot JP morgan 17 million 18 billion US dollars per year Do we want to compete in the new world? We better, you know, uh, start thinking about the future Otherwise we will be irrelevant as in many other areas Euro will become irrelevant if we don't realize the challenges that we face not to mention how much amazon google and facebook are Best thing there and who knows when sooner or later. There's gonna step in more seriously into And there's some some approach on the on the way. Jose Manuel Campo Let me get back to you with a couple of very practical points For example, you talked about reducing uncertainty looking at the future And one of the major appointment next year is the next stress test in europe What can banks expect from the next success? How will they work? Are you planning to change the mechanism? That's has been questioned in the past Yep, uh, i'm glad that you Considered your stress as an important exercise in providing clarity reducing uncertainty That's the way that's the way we should perceive it should be perceived and that's the way we like it to be perceived So i'm happy about introduction, you know in terms of the stress that's we are planning already cycle for next year for 2020 You know, it's we already had a consultations on the methodology with the industry and With the service that hold it we'll probably publish the final methodology in the coming weeks You know the expectation for next year that's going to be fundamentally Of the same type of structure that has been in the last two or three years You know, it's a constrained bottom-up approach with a macro scenario that's currently being worked through Uh in the context of the esrb that would be an appalled by the end of January I don't really have the still insights of what the macro scenario will be but it's based on a macro scenario That supposedly will challenge, you know all all the Markets in the european union in a homogeneous way and provide sufficient stress for the banks in the sample It's a it's in the scenario that has In some ways adapted a little bit to the comments that we have received on the previous Exercises but has not fundamentally changed, you know, it will increase a little bit of transparency We were asked banks to provide Information on their pillar two requirements as a result of the exercise But again, it's not a fundamentally change as I mentioned before, you know We are happy to engage in a further conversation We're starting this process to make sure that as we go forward We continue to enhance these stress tests and we continue to provide them You know in a way that it's helpful to markets and providing transparency That's helpful in this conversation with the supervisors on banks And it's up on the predictability from the point of view of investors Or what will be going forward and as the rules are being implemented as we assess how they're being implemented We need to assess also this will banks have a different say in the process and especially when the when it comes to SREP, for example Well, will banks have a different say right now the banks are Providing information is a bottom-up approach. They have a lot in determining exactly how that Methodally it's applied internally in their models and we need to be sure that that implementation is proper You know, but they're very constrain they're very constrained by the methodology That's precisely why the methodology is constrained to make sure that the implementation by banks on this stress test is adequate And information that we have is comparable As we go forward. I think one of the possibilities is to allow the banks To relax on that methodology so they can express better what they think Fits more their business model and their ability to react to that. That's what possibly going forward I think the important thing is that these stress tests help on that dialogue between the supervisor and the banks On what the adequate situation of the bank is and what are the perspectives of how the bank should Another very critical point is about npl We heard again this morning the achievement in terms of reducing the amount of npl in the balance sheet But there's a lot of interest and concerns through banking management on what your request will be in terms of Treating unlikely to pay and npl in the future Do you feel this is the right moment to push further and faster in the process of deconsolidation on the risking? Well, I think as I mentioned before we made huge amounts of the npl Arena, you know, we have double I mean we have decreased by half the npl ratio in the last three years That's really good. That's an average of the industry that doesn't mean that there are no pockets Still within certain countries with certain banks that need to continue in that process But overall as an assessment of the European Union industry, we said the progress has been huge I think we have also put in place many regulation and ssm directors on how to manage the npl flow going forward We have put forward as I said before long origination guidelines That also will help hopefully making sure that the new loans that are coming into the banks Will not end up being npls later on in the process in a percentage that is less than Adequate, you know, so I think that's all progress I think that we need to continue on the risk reduction on those pockets But now they're really talking about pockets where the ratio of npl remains high Be by banks or some particular countries, you know, but the overall focus should be shifting and making sure that as the new cycle Matures, as we said before, you know the flow that we're getting of npls Is some fanatic would say it's unmanageable and respectable and that we don't end up in five ten years on the road after The cycle has gone through the down part of the cycle with the ratio of npl Hopefully will be higher because that's what the npls do through the cycle But not too high as not to be manageable if merch This is interesting because some market analysts and participants are expecting the regulatory pendulum to swing back And today we heard in the speech of Andrea Enria the word ease And you know that for central banker words counts more than for human like us But ease it was related just to the reporting sides and to alleviate the burden of regulation on this But you know when the word ease comes out of central banker, it's always interesting at least for us Do you expect this regulatory pendulum to swing back because listening to your tone today? You're not on this position I would not say it's a question of tightening or ease for us. It's a question of increasing efficiency How get we more value out of the buck? And that is not something that applies in the private sector. We want to apply it also in the public sector Let me just go back one moment to the stress test issue We have three principles. First, we do not want to rock the boat. That means for the next stress test There will be Some adjustments, but it will More likely be more of the same as in the past, but we are not autistic We are all the time in contact with the industry and we try to take on board Some suggestions that will be made But there is also already the way forward for The stress test afterwards After next year, we will have the targeted stress test of the ECB and we are already discussing What could it be after the liquidity stress test that we did last time around and we were Getting feedback also. We do not stress test in order to occupy our Stuff we do stress test in order to get value out of it And we test this value with the industry and we were told that this had been extremely helpful But then there is two dimensions to it. One is the social value that you get out of it for the collectivity But there is also the individual value that each bank should get out of it So we are already in the midst of a sort of Structural reflection on how we could improve The value of the stress test With less resource intensive Measures both on the side of the supervisors, but also on the side of the banks How can we increase What we extract from the same data collection? How can we maximize the value that we get out from the same amount of data collection? So I think in this respect we are already reflecting How can we also not overload the boat and maybe We should in the future make Not a confusion between what is the macro prudential interest in stress test Which is more a top-down exercise and Distinguish it to some extent from the micro Approach which is more a bottom-up exercise and then Maybe we should also not try to Come to one single view by all means in a very granular line by line approach But maybe it would be worse To say here you have the parameters you Calculate what you want inside each individual bank. You have a bank view. You you publish it and we on our side We could then have Pre-established public methodology and we would do the supervisory side and the market could then reconcile the two And that would take account both of the specificities of each bank and its capacity to react so you see these are Not finished reflections, but we are not static and we want to remain dynamic also in connection with the industry Jose Maria Rodin, do you feel more relaxed or more nervous after that? Never never relaxed never relaxed Yes, that's the point Yes So I think that's got to be a problem And the u.s. Is moving in that direction that's also very relevant the u.s The u.s. Is moving in the direction of is in the burden of stress test Two things there. I think we should also add but whilst maintaining an extremely high level of loss absorbing capacity in the system Yeah, yeah, absolutely. Absolutely. Yeah, but it's about the process And I think that we have to look at the u.s. And that's my message On stress test first it has to be credible if it is not credible If you are testing the end of the world nobody will care So you this stress test they have to be tough, but they have to be credible Second for me the value is more in the transparency In the in the information it gives to the market rather that in the end result We tend to focus on the end result for me the important value is the information you give to the market So that they can they can make their own judgment And I think these two parts are very very important But it's it's better for the banks to try to Relieve the burden and it's also better for supervisors guys come on I mean, it's it's a major exercise that is taking out a lot of your resources So let's try to find a way to to make it lighter on reporting requirements I'm a little bit skeptical. I was at the other side. I know how tough it is So we need to do it. Good luck Andrea with the effort Claire woodburn Yeah, did you want to add something or no? No, I I just I agree with that and I think you know as a management tool stress testing to make sure that you really Understand the risks in your portfolios is absolutely critical So how you know as you talked about if you you meld that where they you know regulatory framework around stress testing This can only be you know better for the system Well, now prepare for your questions because it would be time for a few minutes for questions from the audience But right before that olivia gorson you reminded us that you're a technocrat So i'm not asking you political comments, but to make more interesting our forum today On the front page of deft today the german finance ministers in a piece says that it's time to end the banking deadlock It's time to go towards the common deposit scheme and even though he attached some condition But it's he says itself. It's kind of a big step for a german finance minister Do you feel like this is going to change the agenda or in general the approach and is it the good time? To be fair, I think ever since Olaf Scholz took over It was perceivable that the way The bundesministerium for finance was engaging in the discussion Gradually changed and so The op-ed that he signed today in the ft is is The end of this process and if I may say the beginning of a new one I think it's a it's a very good starting basis it's of course Underambitious vis-a-vis what the commission Think is necessary notably on the deposit guarantee scheme because what he proposes is a Reinsurance system and that's it With a number of conditionalities and Having lived through the painful experience of and an iga if I under sorry intergovernmental agreement if I understood correctly And I can tell you the problem of intergovernmental agreement is precisely that they are intergovernmental We have this for for the single resolution fund I'm not sure we better off that if we were if under the Under the treaty And one of the big reasons for this is that Nobody knows how you police When somebody does not respect an intergovernmental agreement because basically you're not on a treaty. So It's not the job of the commission And it's actually the job of nobody So it has it has a number of don't say but suddenly it's a it's a bold move. It's very welcomed There are a number of ideas that are worth discussing and exploring I know it's in particular the Ideas that are sketched in terms of regulatory treatment of sovereign exposures Which is a very very very contentious issue and I I I note that minister Schultz Doesn't go on risk-weight territory It goes on territories that are in my view With which we can work I note also that he says nothing on self-asset And for a number of for a number of EU countries the two go hand in hand You may recall that the commission put forward the proposal that nobody likes on so-called SBs But has the advantage of providing some form of relatively unambitious and not mutualizing self-asset Which could be Make the balance with a relatively unambitious way of dealing with regulatory treatment of sovereign exposures If measure I suspect that you read it. I don't know if you can comment something on that Well, I would certainly Say for every stone that is brought to finishing the house Unfinished house of banking union. I say thank you Whatever small the stone is or whatever big the stone is of course, we would have our Preferences in one side or the other from I think as a supervisors. So we Also would normally say that it would be helpful To attack the issue of the regulatory treatment of sovereign exposures But there are different methods to do it through concentration risk or whatever I would say we have to recreate the dynamics and if this is helping to recreate the dynamics To move forward by making again suggestions. I think this is highly helpful Yes, this being said I also see that this might be one move the commission New incoming president has said that she is not trying away from treaty change and she wants to have a conference Maybe that is a good moment To integrate all the IGAs that we have not been able to capture so far whether that is ESM or whatever So this is a self-reinforcing dynamics that I want to be Reinforced and which has been dormant since I would say our latest progress two or three years ago All right Claire woodman just a quick one final for you and it's about brexit. How do you see your base in london and Whether perspective might be You know Please okay You know, you know your observation on the impact that this could have on the You know single market union banking union and the business of view as a global bank How'd you see it? Well, actually, I I've welcomed the progress on banking union Absolutely, and I and I hope that this really is a catalyst for you know The promotion of capital markets in the EU because the deepening of liquidity and the development of capital markets Absolutely key and I think that will help provide alternative solutions for dealing with npls going forward, etc So I think, you know in terms of, you know, one of the positives that comes out of this Hopefully we see, you know a much more single capital markets union evolve over time How are you preparing for for this for brexit for banking union I think first of all the banking union, I think I take it like a nice birthday present for the ssm From the german government. So congratulations on the present Which is for all of us Uh on brexit I think we just came forward with an opinion a couple weeks ago prior to the to the removal of the deadline Which we think that, you know, we've been working over the years within banks have done a lot of the work, you know But to make it very quickly, you know Authorization things that are in place, but I think that the transfer of assets people data It's slow and the send opportunity to continue through the brexit goes forward, you know to the transfer effective transfer of all those necessary resources across the uk european union broader will probably help also some some concerns to still about on payments, you know for customers At the new customer level to make sure that they're being provided those payment services By a uk authority. There are no new uk e u citizen all the other way around by And and non uk e u business if you're a uk citizen, you need to make sure that that would be smooth All right, the floor is open for questions from the audience. There are three mics around who want to be the ice breaker Are you still alive? Please And please introduce yourself. Thank you, nicolette urmel from bpc group Benefiting from the presence of chairman and rio. I would like to raise a question about pillar two pillar two is depending on ratings by the bc We have sometimes the the impression that pillar two is at least stable while not increasing because of Maybe a deeper assessment by bc independently of risks and so on and how do you react to the comment of hosemann welcome bar, but the notion that if we have Basel three if we have The package with nsf or else lcr and so on leverage ratio Do you think really that the assessment of pillar two is going to decrease for banks? Having in mind that the legislative packages are Weakening the risks in general Who's the question for andrea? Well, he's not part of the panel now He will be here back in the afternoon. I think for another for another panel any observation on this or There seems to be a lot of appetite to pluck the pillar two And there are as Many people who have active thinking about it. So I advise everyone To come forward with his opinion, but I think within the single supervisory mechanism. We have a very firm opinion ourselves Which is known Next question please Martin Arnold from the Financial Times I thought the comments about the risk waiting on sovereign debt exposures was very interesting if the panelists could expand on how they think Sovereign risk could be dealt with I think some of them talked about exposure limits as opposed to risk weightings Yeah, I'd like to hear about that very clear. Thanks Maybe let me be I'm the least compromise of all So let me try to answer that I think that It is easier to go into the avenue or or diversification limits or diversification Rules rather than risk weights by themselves, you know from a statistical point of view, you know the evidence on on on risk weights Are nonexistent. I mean if you look at the experience of europe in the last 100 years, I mean or 60 years 70 years We have two defaults german default after the the second world war and and the great default that it was not even a default So with this statistical basis to construct, you know risk weights is going to be very difficult on the other hand Diversification limits may have I mean more of a merit. That's my my purely technical take Also, I mean Risk weights it's it's much more heavy in all possible sense of the world issue Nobody in the world nobody suddenly in the basal committee has any intention to touch the the zero risk weight issue So the the real question is why would europe be the only place in the world in which we think it's useful given the number of Transition issues it creates. I mean, it's a completely different question whether if you would design an international financial system From scratch, would you design it with a zero risk weight for sovereign? My personal view probably not Now if you have a system that is as complex as the one we have with zero risk weight Would you take the risks of Transitting on your own Without anybody else on the planet doing it to non zero risk weight environment My personal take again, probably not either and that's I simply noted that my understanding of a quick first reading Of minister shoal's op-ed is that he doesn't go in that territory, which I think is is very welcome and he goes in a territory in which I agree with joseph aria is In which we can work as I said in my first remark on this subject Which is the area of of a concentration limits diversification ratio I mean you have many ways of approaching these issues, which is at the simplest is it's simply that your the sovereign you hold is There's no capital charge up to certain limit and if you cross the limit you start to have certain capital charges So that you have a disincentive to increase your holding or the concentration of your holding in certain sovereign slash usually your home sovereign It's simpler, but it's not simple And if ever we would embark into this that that would require a very very uh Deep studies Careful calibration and probably long transitions other views on this Next question can I raise a question to the panelist? Oh sure Saddo banking, I mean we talk about the crisis You know the role played by the banks But my impression is that we tend to underestimate the role that saddo banks played in the crisis back in 2007 2008 I am worried about saddo banking and I would include saddo banking these new big technological players that may come into finance We talk about Same activity same reason regulation and supervision Yes, that's accepted, but we do not have an activity based regulation We have a regulation that is based on the type of institution that you are So what is your take on saddo banking? Sure if merch I can confirm to Osimair that we are discussing the same subject That's enough for me. Yes But I cannot tell you of the outcome and anyway, uh, we have one objective Don't forget that we follow one objective And to add a word on the previous discussion. We should also not forget that In a single currency area The sovereign bank nexus Has proved to be particularly toxic. Absolutely. That's why one of the reasons why I think we should Move forward in this respect but Again to believe that the central bank activity is a small god for everyone I don't believe it. Uh, this is an exogenous fact that you have to Integrate into your Business model into your risk management into your strategic steering And if you try to Influence it and to believe that all your future is depending only on central banking I think I acknowledge Your deference to your previous employer, but I think that can be dangerous for a bank And on shallow banking, I think I think there's a there's a well understanding of your concern Just I will make two remarks on this one is Is shallow banking by meaning the things that were being done by banks than are being done by somebody else What risks are building there? That's one particular concern There's another conversation when we talk about shallow banking, which is I think more relevant for the solid Which is activities are not being done by somebody else But then when the crisis arise we do find actually somehow those liabilities end up in the banking sector And that's a clear area of concern Yeah, please maybe uh, of course If I go to an extreme and central banks would open an account for every citizen For different purposes including payment services I could understand that you would be worried, but uh, I hope you believe that we are sufficiently serious Yes, absolutely not to rush to such extremes. Absolutely Maria the word on shallow banking I mean because based on what Jose Manuel just said when to be fair It was a big subject in international debate in the in the FSB in particular And at some point some thoughts we should change the name And the shadow banking became non-bank credit intermediation or something like this And of course, I mean, you know, there's there is a Very strong relationship between how you name thing and how you think things And I've always thought that of course you I mean we want to develop a capital market union Does that mean we favor shadow banking? No, I mean you have a number of non-bank financial intermediations that are highly desirable And you have a number that are maybe desirable provided they are in the light and not in the shade and properly supervised And you are a number that are not desirable at all So I think this is an issue of of of being able to distinguish between this And I would like to say that in the European Union We made a job collectively that were made probably nowhere else in the world Let me just take one example and that is the regulation of money market funds All right Now the only thing I can personally regulate is time and I know that our time is gone And so I think that the panelists Precise the panelists offered great food for thought and my last remark is that we heard from chair and ria today that the ssm Promised to be more transparent And a source of stability not surprised which unproperly I translate in a super boring supervision But actually I do not buy this because coming from Italy I know what we're talking about a conversation about supervision And implementation is sometimes wild sometimes dramatic sometimes chaotic but always interesting as I hope the panel has been This morning here in frankfurt. 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Suppose our function is analytic in a connected domain R. Koshy Gorsah tells us that the integral is zero for all simple closed curves in R. But what if C isn't closed? So suppose C1 is a path between Z0 and Z1. If C2 is a different path between Z0 and Z1, then C1 minus C2, that's going along path C2 backwards, forms a closed curve. So the difference of the integrals is zero. Consequently, the integral along C1 is equal to the integral along C2. And this gives us an important theorem. If our function is analytic in a connected region, then the value of the definite integral is independent of the actual path between Z0 and Z1.  It has to be analytic in a connected region. Now as an advanced math course, we should be a little bit careful here. While the theorem is true, you should recognize that there is some hand-waving. Notice that we got rid of the requirement that we have a simple curve. So what if our curve crosses itself? And even if our first curve doesn't, what if C2 crosses C1? So C1 minus C2 isn't simple. And can we always find a closed path that includes our curve C1? The first two questions are actually relatively easy to address. The third is rather more complicated. This hand-waving aside, suppose F of Z is analytic in a connected region R. Let gamma over some interval parameterize a simple path, C, from Z0 to Z1. Then the contour integral will be... And since this is now a single variable calculus problem, we can use the fundamental theorem of single variable calculus to find. Consequently, if F is analytic in a connected region R, then the integral is pretty much what we'd expect it to be. So we can now evaluate an integral like the integral from 1 to I of cosine Z, DZ. Since cosine is analytic everywhere, the fundamental theorem applies, so we have... Note that our connected region doesn't have to be all of the complex plane. All we need to do is find some connected region that avoids the bad places where F of Z is not analytic. So suppose F of Z is analytic everywhere, but at the point shown. If possible, find a connected region R that includes Z equals negative I, Z equals I, where F of Z is analytic in R. If not, explain why not. And we can avoid the bad places by taking the region like this one. Now, a detailed description of the region is generally unnecessary as long as the region actually exists. Well, remember, it's your grade. So suppose F of Z is analytic everywhere, but along the ray shown. Again, let's try to find a connected region that includes Z equals negative I and Z equals I, and we can do that if we take a C-shaped region. What if we have an entire line of non-analyticity? Unfortunately, the line of non-analyticity splits our complex plane into two parts where negative I is in one part and I is in the other. So it's not possible to find a connected region that excludes the line, but includes both points. So let's find the integral of 1 over Z from 1 to I. Now, 1 over Z isn't analytic at Z equals 0, but as long as we avoid the bad place, we can apply the fundamental theorem. Since there is a connected region R that includes 1 and I, where 1 over Z is analytic, we have...


و أقول في القرآن ما جاءت به آياته فهو الكاريم المنزال و أقول قال الله جل جلاله والمصطف الهدي و لا أتأوله الحمد لله رب العالمين لأول الحمد للحسن والثناء الجميل وأشدوا الله إلا الله وحده لا شريك له يقول الحق وهو يهدي السبيل و أشدوا أن محمدنا عبده و رسوله صلى الله عليه وعلى آله وأصحابه والتابعين لهم بحسان إلى يوم الدين أما بعد الله عز وجله سيز و كل إنسان ألزمناه طائره في عنوقه و نخرج له يوم القيامة كتابي يلقاه من شورا الله تباركه تعالى he says every soul every individual ألزمناه طائره في عنوقه الله says we have imposed his fate on his neck every individual و نخرج له الله says we will bring out for him و نخرج له يوم القيامة the day of judgment كتابا يلقاه من شورا which he will see laid open in front of him that's the best إن شاء الله تعالى I want to go through الله he says و كل إنسان منكم oh people every single person from amongst you الله has what ألزمناه عمله الله has imposed the fate of every one of us the actions and the scholars who chose ألزمناه ما قدر له في الأزل من عمل و شقاوة أو سعادة is ابن جليل الطابري ابن جليل الطابري يتقدر افينيا رحمه الله السمعاني ابن عاطية they took their opinion that ألزمناه طائره في عنوقه it means يعني الله imposed the fate for everybody that which has been written في الأزل من عمل و شقاوة أو سعادة that which has been written for each and every one of us our fate whether we're going to be from the people of جنة whether we're going to be from the people of the whole fire how our actions are going to be ابن جليل الطابري if chose that افينيا that's what it means ابن عاطية also chose that رحمه الله و رحمة و سعادة some of the scholars they took the opinion it means ألزمناه عمله يجاز به وحده لا غيره that the fate so what was imposed on the person is their actions in which they will be rewarded based on that and from the scholars who chose that opinion is ابن كتير ابن جزي and others they pushed our opinion and there are some scholars who even combined between the first view and the second view like البقائن الالوسي and others أميل الشنقطير رحمه الله يسيس well-known views he says أن المرادة بالطائر العمله some scholars they said الطائره here it means actions okay من قوله from the statements of the Arabs the second view he said is أن المرادة بالطائري the طائر here is meant by ما سبق له في علم الله من شقاوة أو سعادة that is referring to the fate that has been written and destined for each and every one of us whether it will be from the dwellers of the hellfire or the or paradise then العلمة محمد المين الشنقطيره he said و القولاني متلازماني these two views necessitate one another because لأن ما يطير له من العمله هو سبب ما يقول إليه من شقاوة وسعادة because the action that a person does is in essence what causes his fate to either be from the dwellers of jannah or dwellers of the hellfire رحمه الله and so insha'Allah و تعالى the two views they are together they are not two يعني contradict in views but rather they are two similar views two complementing views that go together الله سبحانه وتعالى is going to judge us all brothers and sisters and account us towards our speech and our actions and everything that we say and through that we are either from the people of jannah or we're from the people of the hellfire and then الله says و نخرج له يوم القيابة كتابا يلقاه من شورة و نخرج له it means اي ونظر غيره لكل إنسان it will be made clear to everybody it will be shown every individual يوم القيامة يدير جدمان كتابا عمله the the book of your action you'll be shown it and you'll find it مفتوحة and open lying in front of you the book will be placed right in front of you open and it can يعني حاويان it has in it لكل ما عمله في الدنيا من خير او شر everything that you did in this world whether it be good or whether it be bad all of it will be there so now you have to watch what you say you also need to watch what you do because you're going to be accounted for that and that's in what الله mentioned in صورة كهف when الله say سبحانه وتعالى و وضع الكتاب فتر المجرمين مشفقين مما فيه و يقولون يا ويلتنا ما لهذا الكتاب لا يغادر صغيرة ولا كبيرة الا احصاها و وجدوا ما عملوا حاضرا ولا يضلم ربك احدا that day و وضع الكتاب with a playbook will be placed in front of you فتر المجرمين that day the criminal the wrong doer what would he do he would look into his book and he would start to see things that he said and he did and this is what he says ما لهذا الكتاب what book is this what such a book is what such a book is this that has in it everything i've said and everything that i've spoken it has never it has not left out anything what type of book is this you see and the people will be judged based on that also الله says in صورة ان شقاق فاما من اوتي كتابه بيميني فسوف يحاسب حساب يسيرا و ينقلب الى اهله مصرورا the one whose book is given to him on the right hand that person has been given a good accountability he's going to enjoy himself and he's going to go back to his family الى اهله مصرورا he's going to come back to his family happy joyful و اما من اوتي كتابه as for the one who's been given his book و رأى ظهري from behind فسوف يدعو ثوبورا و يصل سعيرا he's going to call on destruction for himself he's going to what he's going to call on to destruction for himself i'm going to stop there ان شاء الله و تعالى anything which i have said that was wrong incorrect is from me اشيطان and الله and his messenger are both free from it سبحانك الله و بحمده اشد و لا إله إلا الله استغفروك و توبري السلام عليكم و رحمة الله و بركاته how can you do a two second action right now that will give you a share of the reward of everything we're doing on this youtube channel simple like this video and click subscribe why it will allow youtube to recommend our videos to other users and imagine the huge amount of reward that could be waiting for you on the day of judgment if you did that with a sincere intention of spreading the dean of الله you'll be rewarded for every single person who benefits from one of our videos as a result of your like or subscribe that's an easy two second action that you definitely don't want to miss out on do it now click like and subscribe and don't forget to make that intention


Hi, my name is Emily for On The Fly sessions and I'm gonna sing a song by my band Cosmo Gold called The Wheel.


What's up everybody, Jayce here for JaspiesCaseBrace.com, another new release today guys, 2022-23 Panini Contenders Optic Basketball. This is a five box break, pick your teams number two, and again guys we're giving away a free box of contenders optic. All you have to do is buy two teams in this break to get an entry, remember four teams give you two entries, six teams three entries, etc. If you only buy one team, you're not going to be entered to the giveaway, but good luck to you and your team. So we'll do that giveaway after guys, we'll basically advertise the names and we'll see who has two or more. Alright, let's start the break now guys, I want to go print out the sheet this time. There you go guys, here we go. I got playing the numbers, Anthony Edwards for the Minnesota Timberwolves and a first class A.J. Griffin, that's Hawks and T-Wolves, Adam Kelly and Ben. Yaldon Johnson, we got Bama DeBio, Terry Rozier, Iverson, that's the 1985 edition, more veterans still popping out of here. Nice one though for the 76ers, we'll take that, Winshun, there you go, very nice on-card as well. Who dreams, Max Christie for the Lakers, and then we got a first class ticket, Mark Williams. Zion Williamson, Jabari Smith Jr, nice one there, that's a red ticket though, not numbered, but nice one there. And a George McGinnis to 10 gold all-time contenders for the Pacers, nice. Again, more veterans popping out guys, I feel like man, gotta hit some rookies at some point so if it's not in this case, the second half bunch is super loaded. But nonetheless though, nice one there for the Indiana Pacers, Adam Kelly. And then added with the Houston Rockets, nice little J-Dub, first class for my Thunder, and Nikolaj Jokic for Denver. Thunder's gonna add him, Kelly, stud right there, that J-Dub, and then Denver Nuggets is going to Nicholas. Alright, let's get a rookie ticket here man, looks like another friggin' answer. Call Anthony, got a pink, Johnny Davis, I don't know what pink's out of though. Pink is out of 75, and then our Herb Johnson at 99, Jesus Christ. So many veterans man, we don't get anything crazy rookie-wise here in those next two boxes. Three and four has to be loaded with rookies, there's just no way, it's usually pretty balanced. Nice Johnny Davis though Mark, former Jason Tatum, and a Cape Cunningham uniformity, blue ice. Pistons gonna add out of 75 and then Celtics is going to Peter. I thought we were gonna have to see the second half guys, man, these would be some good rookies here. I mean the second half's still gonna have some nice stuff, because I assume it's pretty even, but I don't know, sometimes every case is different, alright it looks like a ticket finally. Jared Jackson Jr., 75, Kelton Johnson, alright baby come on, give me something nice. Clippers, Mark, still hit though for you, gotta be something hiding here guys, gotta be, come on end it off with a strong one, there's just so many vets in this one again, Tyrese Halliburne, Optic Illusions, and a Joellen Meade uniformity, red ice, 76ers Wen Shun, and then Pacers gonna add on Kelly, Christian Wood also, I don't even think we've hit a Black Pandoria right, usually those are one per case. And David Roddy, that's a little better, out of 99 red for the Memphis Grizzlies, and again Matt taking the Grizzlies one of the last few teams, there you go man, I was a little bit better but definitely can be so much better guys, so much better, I don't know, I've seen more than enough of this over the last like eight years, definitely gotta be something nice. I think they started this in what, like 2018 or so, anyway, there you go guys, so David Roddy, Molsa, that Herb Jones, you dig it that gold, George McGinnis, and then of course that retro, Allen Iverson which is always nice, but I still feel like there's something massive hiding in three and four guys, so if you can grab your sponsor guys I still think we can get that done tonight, let's give it a box though, remember if you bought two more teams you get a chance to win a sealed box of contenders off it, remember not from this case, it's from a separate case, so let's switch scenes, and like I said, free box by two teams, so Adam Kelly got eight, so that's four entries, Ben with one, Brian with one, and then Ed with two, Mark with just the heat, or Mark as that is, Mark and with four, so that's two entries, Matt Elwood's six, so that's three, Nicholas with two, Peter with two, Tyler with one, and then Winshub with two, all right, possible 15, we got 13 again, one and 13 shot, all right, let's roll, it's a three and a five, eight times, good luck, eight times, one, two, three, four, five, six, seven, and eight times, three and a five, eight, eight, Peter, congratulations man, sealed box coming your way, and like I said guys, I just really feel like this first enter had some cool veteran stuff, don't get me wrong, we're just loaded with veteran stuff, but just that powlow up and coming, it wasn't even a real ticket, you know, I don't know, I'm just more like, I think there's a lot more guys, so again, three and four is in the store, if you guys want to run it back down to nine and 13 left guys, I think we can do it, appreciate it guys, jaspyscasebricks.com