Also, the risk of funding runs should be reduced by the increase in the quality of information on firm exposures that can be made available to regulators, and, in principle, through increased disclosure to market participants. I also think that OTC derivatives reform is an important complement to the emphasis placed on strengthening individual institutions, which is part of the broader reform agenda. Financial stability is not just about individual institutions but also about how the entire system interacts. For example, are the incentives in the system appropriate and does the system amplify or dampen shocks? Thus, it is important that reform efforts not concentrate exclusively on the systemically important financial institutions, but also that these efforts focus on the market products and practices and the linkages among markets, market participants and infrastructures. Despite the progress made to date, I do have some concerns about the OTC derivatives reform effort. My first concern is about pace. For example, it seems to me that we have made much more progress in strengthening individual institutions through higher bank capital and liquidity requirements than we have made in reducing risk in the OTCD space. Now some of this is inevitable because OTCD reform is harder and we are not as far along. It requires the creation of new institutions to clear such trades or to house the trade information. It also requires national legislation to be flexible enough so that it can work coherently on a global basis.
So far, the BNB Governing Council has adopted concepts for the work in the main areas of activity; a package of amendments to the internal rules and regulations, as well as specific measures for resource and capacity improvement. Our full participation in the institutions of the Banking Union plays an important role in consolidating the integration process. Obviously, this is a topic that will be on the agenda in the next few years and one we will have many occasions to discuss. Meanwhile, maintaining the capacity of the banking sector for continuity of lending activities will be our joint contribution to supporting each individual bank customer and the country’s economy. As during the most difficult phases of the crisis, the banking sector should be able to take on the supportive role as a source of credit in the subsequent period of recovery and growth as well. Despite today’s crisis picture, such a period may occur relatively soon. The challenges arising from COVID-19 appeared unexpectedly and the negative results in the economy manifested themselves quickly; yet overcoming the crisis may just as likely occur in the foreseeable future, if solutions are found to effectively restrict the pandemic. Let us mark the Banker’s Day in the difficult and unprecedented 2020 on such a note of hope and optimism! 3/3  BIS central bankers' speeches