see, the ssm is well on track and i am fully confident that it will be operational at the end of this year, as expected. but this good result should not lead to forget that for the banking union to be fully successful, the ssm needs to be completed with the adoption of a single resolution mechanism. indeed, in line with my colleagues at the ecb, i consider the single resolution mechanism to be another essential pillar of the banking union, alongside the ssm. ideally, the srm should consist of three main elements : a single system, a single authority and a single fund. this is why the ecb has constantly been encouraging all the relevant parties to make further progress in adopting the srm, which should be in place by the time the ssm becomes operational. you know that a political debate is taking place currently between the european council of ministers and the european parliament. the version of the srm that has been agreed among european governments at the end of last year is not ideal, notably because it requires a long transition period which could fuel uncertainties. but what matters most is that we have clear and common set of rules concerning banks resolution. for the mechanism in itself, europe has proven in the past that, confronted to acute crisis, it was able to accelerate the processes and deepen its solidarity. ladies and gentlemen, i hope i have managed to give you a clear and up - to - date picture of the advance towards banking union. i would like to conclude by stressing just how crucial this development is in order to strengthen our economic and monetary union. i think that the ecb proved, in the darkest moments of the crisis, that it was completely committed to the euro. our actions were driven by a profound belief that the single currency is our most valuable shared asset and that it brings enormous economic benefits. today, with the construction of a banking union, we aim to demonstrate that this is a long - term commitment. thank you for your attention. bis central bankers ’ speeches

rise in unemployment could reach two points. ] secondly, the automatic stabilisers have a strong effect in the euro area, thanks to unemployment benefits and a broad tax base. they are, by construction, temporary, appropriate and targeted, which guarantees their countercyclical impact. thirdly, large - scale stimulus packages have been adopted and shall be implemented in 2009 and 2010. in the euro area, they are equivalent to 1. 7 % of gdp and are expected, according to the imf, to contribute to raising growth by 0. 9 point in 2009 and 0. 3 point in 2010. fourthly, governments ’ very strong commitment to guaranteeing the solvency of banks should prevent risks of a credit crunch. in france, the two structures set up, the societe de financement de l ’ economie francaise ( sfef ) and the societe de prises de participation de l ’ etat ( sppe ), give the government considerable room for manoeuvre to recapitalise the banking sector and ensure its financing, and thereby that of the economy. last, but not least, the 325 - basis - point decline in the ecb ’ s refinancing rate since july 2008 is unprecedented, both in terms of size and speed. in an environment characterised by fixed rates, the effects of this decrease shall spread progressively, but rates on new loans are already falling, in line with the cuts in policy rates. in addition, the ecb has embarked on a quantitative easing policy aimed at banks, which, by contrast with the united states, provide 80 % of the financing of the economy. since october 2008, the ecb has been providing unlimited liquidity and has eased collateral rules for its refinancing operation. at its may meeting, the governing council has decided to extend the maturity of its provision of liquidity up to one year and to purchase euro - denominated covered bonds issued in the euro area. as a result, the 1 - year interbank market has converged to the level of the us 1 - year market rate. what type of financial regulation framework are we moving towards? the current crisis has highlighted certain failures in financial regulation and this is why, beyond the immediate measures i have just described, an ambitious agenda to reform financial regulation has been launched. this overhaul is crucial for laying the foundations of a more stable financial system. it should not be implemented in a hasty manner if we want to avoid hurting the recovery from the crisis.