challenge is to stay on this path to create the fastest possible rebound in growth and job creation. this entails building a genuine banking union with a strong single resolution mechanism ; it entails finding new ways to support structural reform implementation, for instance through so - called reform contracts ; and it entails deepening our political union to ensure full legitimacy in the eyes of citizens. all this requires effort and determination to achieve – but it is well within our reach. bis central bankers ’ speeches

facing increasing demands for consolidation. the broadening of the market size and increasing share of cross - border transactions has had a positive impact on financial stability. if there were only a few market participants and the concentration of the interbank liabilities were high, the likelihood of a bank failure having stronger repercussions on the viability of other institutions would be greater. in addition, the wider euro area money markets can now absorb liquidity shortages more easily than before, as banks can borrow more readily from foreign institutions. however, if some banks should nonetheless enter into a distressed situation, the probability of the problem spilling over to other euro area countries is significantly greater than before. the wholesale market is a major channel of the transmission of potential financial instabilities. moreover, the existence of a common framework for accessing central bank liquidity is tying together euro area financial institutions to a much larger extent than usually recognised. let me now turn from wholesale activities to banks ’ customer businesses. as european banks are typically universal banks, they combine at a single institution a wide range of products. the markets for these products have varying degrees of integration - some are already global or european, while others have remained national or even local. at least the major banks already operate in strongly internationalised markets for a number of their products and already have geographically diversified activities. this makes them subject to various influences originating from outside their national markets. even if banks remain nationally based, they are increasingly subject to international market developments and the national tendencies are increasingly influenced by international developments. hence, the usual argument that cross - border mergers and acquisitions are a necessary condition in order to achieve a more integrated and international banking system does not seem very strong. in particular, many of the asset management and investment banking services are already quite internationalised, as the capital markets have taken strong steps towards integration and growth after the introduction of the euro. banks ’ own securities holdings have also become increasingly diversified across borders. the trend has been quite strong for government paper, as well as for corporate bonds. the amount of instruments issued by other euro area governments rose by 38 % in 1999, and those by firms located in other euro area countries by 23 % in banks ’ portfolios. to take an example of the financial services provided by banks in the capital market area, the leading underwriters of bonds issued by european firms are the major european banks, alongside the largest us investment banks. the “ league ” in which these players compete is clearly not a domestic one.