Acknowledging all the progress that have been made in the global banking system, especially in raising capital buffers and in sound liquidity management, there is still a long way to go in creating proper incentives in the financial sector. In one major respect, Germany has become a frontrunner.
At the beginning of this year, the German government introduced a new resolution scheme which facilitates the restructuring of distressed banks at the cost of their owners. 4. Sovereign risk  I now come to my second proposition.