Frankfurt am Main, 2 March 2016 Press Release
From challenges to opportunities: rebooting the European financial sector
Keynote speech by Benoît Cœuré, Member of the Executive Board of the ECB, at SZ (Süddeutsche Zeitung) Finance Day 2016
Ladies and gentlemen,
For those of you here who work in the financial sector, your job depends on your ability to assess and manage risk. What allows you to do this is the fact that many risks are tangible – they can be identified through analysis, measured through models and hedged using financial instruments. Risk is not per se an obstacle to decision-making; it simply frames the parameters of those decisions.
The situation is different, however, when risk morphs into uncertainty [1]. Uncertainty, by definition, cannot be predicted or quantified. It is therefore much more of an impediment to decision-making. And that brings with it economic costs: firms postponing investment, households postponing consumption and increasing savings.