are lowest. as the ecb has argued on several occasions7, this is one reason why we need to urgently focus on creating the legal and regulatory framework for a genuine single market in capital in europe. essentially, what we are aiming for is a more balanced financing mix where firms have a greater ability to substitute bank and market finance, and hence intermediation becomes more contestable and resilient. i would however emphasise that balance is key ; we should not view market finance as a cure - all. indeed, there is some research to suggest that too much substitution towards market finance may lead to less total borrowing, as firms that replace bank loans with bond issuance internalise the fact that this type of borrowing will be harder to restructure in bad times. 8 besides, europe does not have a set of institutions consistent with a fully market - based allocation of savings, such as funded pension schemes. in any event, a more diversified financing mix is realistically a project for tomorrow. we are now seeing signs that credit demand is picking up, making it imperative that nascent demand is not choked off by credit supply constraints. our focus today therefore has to be on bank finance, namely ensuring that it can continue to fund the real economy even as banks downsize and restructure. and this is where two current policy initiatives come in. the first is the comprehensive assessment of bank balance sheets, which has the potential to ensure that supply constraints diminish as the cycle turns this year. one purpose of the assessment is to steer the deleveraging process towards a “ good ” form – i. e. banks quickly carving out non - performing assets and raising equity – which international experience suggests leads to a faster rebound in credit to viable firms. indeed, empirical research suggests that the oft - heard view that higher bank capital leads to lower loan supply is not accurate. long - run evidence for germany, for example, finds that higher bank capital tends to be associated with higher business loan volume, with no evidence of a negative effect. 9 while the exercise will only conclude next month, we can already see signs that it has affected both the speed and quality of deleveraging. whereas from 2011 to 2012 asset deleveraging accounted for only 0. 1 percentage point of 1. 3 percent increase in banks ’ core tier 1 ratios, from 2012 to 2013 ( i. e. after the assessment was launched ) it accounted for 1. 0 percentage point of the overall increase of 1.

mario draghi : reviving the spirit of de gasperi – working together for an effective and inclusive union speech by mr mario draghi, president of the european central bank, at the presentation ceremony of the de gasperi award, trento, 13 september 2016. * * * i have many reasons to be grateful and honoured by your decision to award me the premio de gasperi today. his character and his experience provide us with an inspiring message, loud and confident : “ in europe we go forward together in freedom ”. this message is rooted in the 20th century history of our continent. the raison d ’ etre of any government is to provide security for its citizens, both physically and economically. and in democratic societies, that means providing safety and security by preserving individual liberties and individual rights, by promoting social fairness and equal opportunities. the statesmen who, after world war two, looked back over the preceding half - century could reach only one conclusion : that the governments which emerged from nationalist and populist movements, and which were carried into power by a mixture of charisma and lies, completely failed to offer their citizens security, fairness and freedom. they had betrayed the very reason for their existence. in outlining the future shape of international relations, de gasperi and his contemporaries concluded that only cooperation between european governments within a common organisation could ensure the joint security of their citizens. they saw that implanting democracy in the nations of europe would not be enough. europe also needed democracy among nations. they understood that building barriers between countries would make them more vulnerable and less secure, not least due to their geographical proximity ; and that withdrawing behind one ’ s borders would make governments less effective. de gasperi ’ s vision of how this joint process should be shaped was articulated in various speeches he gave in those years. common challenges should be addressed via supranational instead of intergovernmental strategies. speaking to the assembly of the european coal and steel community in 1954, de gasperi noted that “ … from 1919 to 1939, some seventy international treaties were concluded – and all became mere pieces of paper when it came to their implementation ” because of the lack of “ joint control of common resources ”. 1 and the experience of politicians was validated by distinguished economists, such as ragnar nurkse, who showed how those treaties ended up fostering protectionism. 2 integration above all had to meet the immediate needs of the people. as de gasperi observed, “ we must