bankers ’ speeches to the greek sovereign and which, on top of that, are subject to a “ haircut ”. this should offer sufficient protection. ” last year saw the start of the banking union. what is the next big project for the ecb? “ that would be the capital markets union. although it is not our direct responsibility – the european commission is responsible for the proposals – it is very important for us. a wellintegrated and deep capital market would facilitate the functioning of our monetary policy, as our key interest rates would then be transmitted more smoothly. and there would be more risk - sharing via ownership of assets. if an economic recession arose in a euro area country, an effective capital markets union would soften the consequences of that recession. but the benefits of a capital markets union can only be reaped if a truly ambitious approach is taken here. “ could you explain that some more? “ an effective capital markets union requires the harmonisation of company law, of bankruptcy law, of taxation of financial products and of regulatory and supervisory frameworks. that is an enormous task. this way firms could issue shares and debt across the union, to a much greater extent than they do now, as a result of the level playing field for all stakeholders ( the shareholders, the issuers, etc., ed. ). but we must not forget that the european countries have already come far in harmonising policy, especially the euro area countries. ” did eu commissioner jonathan hill not say that a capital markets union would not be in place before 2019? “ if it is completed in 2019, i would be very happy. ” bis central bankers ’ speeches

luis de guindos : financial stability and the pandemic crisis speech by mr luis de guindos, vice - president of the european central bank, at the frankfurt finance summit, frankfurt am main, 22 june 2020. * * * as the last speaker of the day, after providing you with a brief overview of the economic outlook for the euro area, i will focus my remarks on the financial sector, the stability of the financial system as a necessary condition for the recovery from the pandemic crisis and related policy issues. the euro area is experiencing an unprecedented contraction. following a sharp drop in real gdp of 3. 6 % in the first quarter of the year, a much larger contraction is expected in the second quarter, with eurosystem staff projections seeing a fall of 13 %. after this unprecedented downturn, a rebound in activity is expected in the second half of the year, supported by very accommodative monetary and fiscal policies, along with an expected gradual resumption in global activity. however, the speed and scale of this recovery are extremely uncertain. eurosystem staff macroeconomic projections for the euro area foresee real gdp falling by 8. 7 % in 2020 and rebounding to growth rates of 5. 2 % in 2021 and 3. 3 % in 2022, which means that gdp at the end of 2022 will still be 4 % lower than projected in our march 2020 staff projections. turning to inflation, euro area headline inflation is declining sharply and is expected to remain subdued this year. euro area annual hicp inflation decreased to 0. 1 % in may, down from 0. 3 % in april, mainly on account of lower energy price inflation. over the medium term, weaker demand is expected to put downward pressure on inflation, which will be only partially offset by upward pressures related to supply constraints. annual hicp inflation is projected to be 0. 3 % in 2020, 0. 8 % in 2021 and 1. 3 % in 2022 in the june 2020 eurosystem staff projections. the monetary policy measures taken by the ecb in march were critical in removing the tail risk of the pandemic, with the drop in economic activity and rising financial market turmoil morphing into a financial crisis. that risk has receded materially since march. however, in our reassessment of the situation in june, two main factors called for additional monetary policy easing : the deteriorating inflation outlook threatening our medium - term price stability objective and