Christine Lagarde: Macroprudential policy in Europe – the future depends on what we do today

Welcome remarks by Ms Christine Lagarde, President of the European Central Bank, at the fifth annual conference of the European Systemic Risk Board (ESRB), Frankfurt am Main, 8 December 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

It is my pleasure to welcome you to the fifth annual conference of the European Systemic Risk Board (ESRB).

Today's conference marks the first decade of the ESRB – although the pandemic has delayed our celebration by one year.

That decade has been one of important achievements. Most notably, macroprudential policy for banks has developed from an idea into a reality. But this morning I would like to look forward and ask: how can we prepare for the next decade?

There are known threats to financial stability which have always been on the ESRB's radar, such as unbridled risk-taking, stretched asset valuations and excessive credit growth. But today we are also facing new types of threats which could affect financial stability profoundly.

Two such threats stand out: climate change and cyber incidents. And both have common patterns. Both are global phenomena that do not stop at borders. Both are cross-sectoral, potentially affecting banks, insurers, investment funds and the markets that connect them. And both are complex, depending on many factors and actors.