6  BIS central bankers’ speeches  The role of banks in financing the European economy To conclude, I would like to emphasise the importance of redirecting the banking sector towards strengthening its important role in the society by means of regulatory reform. The financial crisis reminded us that financial stability is a prerequisite for stable economic growth.
Banks have a pivotal role in providing financing to households and firms. It is particularly so in Europe where the banks’ role in corporate finance has traditionally been large. The banks’ role in corporate finance is central especially for small and medium sized enterprises (SMEs).