This will contribute significantly towards making the banking sector in Europe more robust and creating a level playing field. Second, a Single Resolution Mechanism will hopefully be proposed by the Commission in the second half of this year. In the meantime, the Bank Recovery and Resolution Directive should be adopted by the middle of this year, which will provide a better framework for coordinating resolution of cross-border banks and provide national authorities with new resolution powers. These new powers – like writing down capital instruments and bailing-in creditors – should help ensure that the financial sector, rather than taxpayers, bears the burden in future bank resolution. Third, the creation of a common backstop is already underway with the on-going discussions on direct bank recapitalisation by the European Stability Mechanism (ESM). This is an important tool for the near term to help break the bank-sovereign loop and exit the crisis. In the longer term, the fiscal backstop to the Banking Union could perhaps replicate the successful arrangements we see in the U.S. where the Treasury provides a credit line to the FDIC, which is repaid over time through additional levies on the financial sector. Fourth, the establishment of a common system of deposit protection will begin with the adoption of the Commission’s proposal on deposit guarantee schemes, expected by mid2013. This provides a harmonised framework and should help shore up confidence in national schemes – particularly, in my view, if there is a “depositor preference” rule in situations where banks are resolved.

This creates fear and the obvious need to fight and prevent them. But common crimes do not involve huge monetary benefits. They are therefore less likely to be compromised in the law enforcement process. On the other hand, economic crimes generally do not have direct immediate impact on the publics' lives and properties because of their non-violent nature. Hence, such crimes do not receive public attention and could easily be excused as non-priority cases. Furthermore, the enormous financial benefits gained from economic crimes usually made it possible for the perpetrators to exploit their financial powers to intervene in the law enforcement process thus keeping this matter away from public scrutiny. People who are behind economic or financial crimes are usually quite smart and sophisticated. They tend to make use of their financial resources to build extensive connections in various organizations involved in the law enforcement process as well as the political system. Thus, quite different from fighting common crimes, the authorities combating economic crimes also have to fight the interferences from influential powers, which often times are far more difficult than the investigation itself. It is clear that in order to effectively fight against economic and financial crimes in any society, a strong political will and full commitment of the government is needed. The government must also recognize  BIS Review 29/2005  1  that economic and financial crimes are vicious and destructive enemies of the country, which need to be unreservedly eradicated and prevented in every way possible.