Discussions over the ESM have raised another issue, which I know is a sensitive topic in Italy: the restructuring of sovereign debt. France also believes that we need to tread carefully here. We should avoid adopting a mechanical approach, because when rules are automatic, market expectations can trigger sudden chain reactions and pose a threat to financial stability. On the other hand, it might be useful to hold technical discussions on ways of implementing collective action clauses (CAC). ** I would like to conclude by quoting President Luigi Einaudi, who wrote this in 1954: “In the life of nations, the mistake of not seizing the moment is usually irreparable. The need to unify Europe is evident. [...] This is not a problem of choice between independence or union, but of choice between existing in unity or disappearing.”5 In a world marked by growing uncertainties – many of 4/5  BIS central bankers' speeches  which, unfortunately, also stem from the United States – the need to preserve and reinforce the unity of Europe is stronger than ever. This does not mean ignoring the problems, but rather working together, as French and Italians, to achieve what we want: a more efficient and solidarity-based Europe. Thank you for your attention. 1 See Bugamelli et al. 2017, “Back on track? A macro-micro narrative of Italian exports", Banca d’Italia Working  Paper No. 399. 2 Standard Eurobarometer 89, Spring 2018. 3 Banca d’Italia, Financial Stability Report No. 2 – 2018. 4 Results of the OECD’s PIAAC survey.

Given this situation, in 2013, the SNB made a proposal to the Federal Council, after consultation with the Swiss Financial Market Supervisory Authority (FINMA), that the sectorial countercyclical capital buffer (CCB) be activated for the first time, at 1% of riskweighted mortgage loans financing residential property located in Switzerland. The Federal Council acted on the proposal. Since last September, banks have therefore been required to provide more capital backing for residential mortgage loans in Switzerland. Certainly, momentum on the mortgage and real estate markets was dampened somewhat in 2013. However, the measures introduced by the beginning of 2013, such as the activation of the CCB as well as those taken by the industry itself, were insufficient to prevent a further build-up of imbalances. Therefore, the volume of mortgage lending was still rising at a substantially stronger pace than national income. As a result, in Switzerland as a whole, debt was increasing significantly faster than people’s capacity to offset this debt with income. This  BIS central bankers’ speeches  3  development is particularly critical because the correlation between mortgages and national income is very high, both in historical terms and compared with other countries. In addition, in an environment of persistently low interest rates, coupled with banks’ undiminished appetite for risk, the danger remained considerable that imbalances would build up further unless additional countermeasures were taken. In January 2014, therefore, acting on a proposal by the SNB, the Federal Council increased the CCB from 1% to 2% of risk-weighted positions financing residential property in Switzerland.