, debt sustainability would be much less of a concern to the rating agencies and the efsf could look forward to upside in the recovery by being the owner of two banks with a substantial national franchise. although the irish case has been exceptionally severe, it is evident that the same formula could be relevant to other countries. the greek debt restructure brought most of greece ’ s banks under water, and they are being recapitalised by injection of efsf bonds. but once again the government – in this case the greek government – is assuming the corresponding debt, and acquiring or increasing its ownership stakes in the banks. if there ’ s any european government that doesn ’ t need any more debt, it ’ s the greek one. another missed opportunity, one might say, in the design of restructuring and resolution policies for european banking. while the banking losses for uk banks were on a smaller scale relative to the size and fiscal capacity of the uk economy, looking ahead, policymakers in countries even as large and bis central bankers ’ speeches prosperous as the uk look with some trepidation at the scale of their largest financial institutions – together with the fact that these institutions hunt in packs and do not represent a diversified pool of risks. one solution is to shrink the institutions and distance their liabilities from the state. this is definitely needed. in addition, though, especially looking to future risks, a complementary strategy, relying for bank recapitalisation where needed not on one sovereign but on the pooled fiscal resources of a larger and more diversified entity such as the eu needs to be developed. it ’ s not hard to see, though, that to get such a degree of cross - border public financial engineering working smoothly at the european level requires an institutional structure that is both more comprehensive and more streamlined than exists today. it is clearly something much more ambitious than has ever been attempted by the imf and world bank. a banking union in europe as you may have guessed, i have used a less familiar route to back into what is increasingly becoming a conventional line of argument, namely that we have found that a monetary union needs to be accompanied by stronger arrangements to ensure what might be called a banking union. in simple terms, the main elements of a banking union would be a degree of ( i ) centralised bank regulation, licensing and supervision as well as ( ii ) central responsibility for resolution and for depositor protection and any public sector solvency support. it ’ s not just the spillover effects

economic fragmentation. other downside risks we discussed at the meetings were a severe tightening of global financial conditions, sharper monetary policy impact amid high debt, stickier inflation, systematic sovereign debt distress in emerging markets and developing countries, china's growth and the fragmentation that is hampering multilateral cooperation. the increased uncertainty faced by the global economy is reflected in the ongoing high uncertainty around the outlook for the euro area. the governing council of the ecb will be especially focused on incoming data as part of making our monetary policy decisionmaking in the coming weeks. our recent decisions represent a significant tightening of the monetary policy stance, commensurate to the significant challenges to price stability we have been facing. and on the evidence so far, it is too early to start planning for a pause in our tightening of policy. indeed, and again based on the evidence we have to - date, rates will need to continue at restrictive levels to help re - set the balance between supply and demand in the economy and bring down inflation. supervisory milestones ahead in 2023 deputy governor's sharon donnery and derville rowland have recently spoken about our supervisory milestones for 2023. this year our principal focus will be on : the assessment and management of risks to financial and operational resilience ; continuing to drive for fair outcomes for consumer and investors ; overseeing the withdrawal of ulster bank and kbc from the irish market ; and detecting and sanctioning market abuse. transforming our approach to regulation and supervision a key priority in our strategy is to transform how we regulate and supervise the financial services sector. our objective is more efficient and effective regulation and supervision, better enabled by data and technology, and supported by new skills and enhanced capabilities. 2 / 3 bis - central bankers'speeches we will retain our risk - based approach to supervision but operate in a more integrated manner across our expanding mandates. we are currently in the early design phase of this, but it is something we would like to discuss with you in the future. we are aiming to put innovation at the centre of our approach to regulation and supervision, both in how we enhance our own operational capabilities and also in how we harness the benefits and mitigate the risks arising from innovation within firms and the financial sector as a whole. on the enhancement of our innovation hub, i understand there was a good discussion, with useful insights, at the innovation sub - group about actions that we can consider as part of this work. we will engage with you and the wider