Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the farewell symposium in honour of Klaas Knot

Amsterdam, 3 October 2025

Geopolitical tensions, soaring asset valuations and financial innovation have put the topic of financial stability back on the agenda. But today, people are talking about hedge funds, bond market functioning, private credit, valuations of AI companies and stablecoins. They rarely mention banks.

There is a good reason for this. As Klaas Knot explained at the latest ECB Annual Research Conference, in recent periods of financial stress banks have acted as shock absorbers rather than shock amplifiers. And this has been largely due to the comprehensive banking regulation introduced after the global financial crisis (GFC) of 2008.

Today, however, these regulations are increasingly being questioned in an environment of growing nationalism and economic fragmentation, impeding international collaboration. In Europe, too, calls for the deregulation of…