20 November 2019

Joachim Wuermeling: Welcome speech - Deutsche Bundesbank reception on the occasion of Euro Finance Week

Welcome speech by Prof Joachim Wuermeling, Member of the Executive Board of the Deutsche Bundesbank, in which he focuses on the importance of the Basel standards, the global role of the German and continental financial centre, and the competition worldwide banks are facing from tech firms.

Following the severe financial crisis, we have succeeded in creating a new architecture for a resilient and at the same time high-performance financial system.

One part of that architecture is Basel III, and that's the way it should stay. Mr Wuermeling firmly believes that instead of discussing ways to undermine or weaken the standards in the EU, there is need to work, at both a global and a European level, towards full implementation of the standards worldwide. That was the first point he made.

Regarding future role in financing the European economy, Mr Wuermeling says: “Post-Brexit, we will no longer have the global financial powerhouse of London within the EU's jurisdiction. The multilateral principles and rules guaranteeing a level playing field for trade and investment worldwide are increasingly being called into question, creating a sense of uncertainty, particularly in trade relations.

“Under these circumstances, we need to be able to finance the EU's real economy, including the necessary digital innovations and the transition towards a less carbon-intensive economy, under our own steam - for example, by forging a network of continental financial centres.”

EU regulators, banking supervisors, and above all the banking industry, need to rise to this challenge; this includes completing the banking union, pressing ahead towards a capital markets union and implementing the Basel standards.

Regarding the way how to address digital financial technology, Mr Wuermeling says: “We are market-neutral, and prefer neither incumbents nor new providers. We will, however, do everything in our power to defend the prudential space - and by that, I mean the space in which the legislator has issued a mandate for sovereign supervision in the public interest. Digitally driven "unbundling" of financial and monetary functions by initiatives ranging from the cloud to Libra should not mean taking activities outside the existing perimeters of public oversight.”

Full speech on BIS

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