Finally, in order to complete the banking union, we need a single, fully-fledged EDIS. The EDIS would strengthen depositors’ confidence through an equal level of depositor protection across Member States and therefore promote financial integration. Ultimately, a fully-fledged EDIS would be strengthened by the pooling of resources, thus building confidence in the single currency, throughout the Monetary Union. The finalisation of the banking union through its third pillar would require an adequately sized fund, built and financed by banks by raising ex-ante contributions, accompanied by a public backstop as recommended by the ECB opinion on EDIS.6 The calibration of these contributions should help to minimise the risk of some banking systems subsidising other banking systems in the event of a crisis. A recently published ECB Occasional Paper7 simulating severe banking crises, demonstrates precisely that, with proper bank riskbased contributions, an almost negligible cross-border subsidisation occurs. For this reason, a crucial element of a fully-fledged EDIS would consist of risk-adjusted contributions to the fund based on bank-specific strengths and weaknesses benchmarked at the banking union level. Progress is also needed in the framework for macroprudential regulation. I regard this as a precondition for safeguarding financial stability in an integrated market and therefore protecting the Single Market. The CRR/CRD IV8, the ESRB and the SSM Regulations already define the key elements of the macroprudential framework, but as the framework is tested and more experience is gained the rules will need to be steadily revised.

Kremer, M. and A. Popov, (2018), “Financial Development, Financial Structure, and Growth: Evidence from Europe”, Special Feature A, ECB Report on Financial Integration in Europe. Leandro A. and J. Zettelmeyer (2018), “The search for a Euro area safe asset”, Peterson Institute for International Economics Working Paper 18–3. Mokyr, J. (2014), “Secular Stagnation? Not in Your Life”, Geneva Report on the World Economy, pp. 83–89. Monti, M. (2010), “A New Strategy for the Single Market”, report to the President of the European Commission, José Manuel Barroso, May 2010. Tumpel-Gugerell, G. (2009), “The road less travelled – exploring the nexus of macro-prudential and monetary policy”, speech at the conference Learning from the financial crisis: financial stability, macroeconomic policy and international institutions, Rome, 12 November 2009. van Ark, B., M. O’Mahoney and M. Timmer, (2008), “The Productivity Gap between Europe and the United States: Trends and Causes”, Journal of Economic Perspectives 22:25–44. 1 Tumpel-Gugerell, G. (2009), “The road less travelled – exploring the nexus of macro-prudential and monetary  policy”, speech at the conference “Learning from the financial crisis: financial stability, macroeconomic policy and international institutions”, Rome, 12 November 2009. 2 Beck, R., L. Dedola, A. Giovannini and A. Popov (2016), “Financial integration and risk sharing in a monetary  union”, ECB Report Financial Integration in Europe, Special Feature A; see also Asdrubali, P., B. Sorensen and O. Yosha (1996), “Channels of Interstate Risk Sharing: United States 1963–1990”, The Quarterly Journal of Economics 111(4): 1081–1110.