##rb international conference on the macroprudential use of margins and haircuts ”, frankfurt am main, 6 june 2016 ; constancio, v. ( 2017 ), “ the future of finance and the outlook for regulation ”, remarks at the “ financial regulatory outlook conference ”, rome 9 november 2017. 11 esrb ( 2017 ), “ sovereign bond - backed securities ”, esrb high - level task force on safe assets ; for the original proposal referring to esbies see brunnermeier, m., l. garicano, m. pagano, r. reis, t. santos, d. thesmar, s. nieuwerburg and d. vayanos ( 2011 ), “ european safe bonds ”, the euronomics group. 12 monti, m. ( 2010 ), “ a new strategy for the single market ”, report to the president of the european commission, jose manuel barroso, may 2010. 13 for a good analysis of these and other proposals see leandro a. and j. zettelmeyer ( 2018 ), “ the search for a euro area safe asset ”, peterson institute for international economics working paper 18 – 3. 14 van ark, b., m. o ’ mahoney and m. timmer, ( 2008 ), “ the productivity gap between europe and the united states : trends and causes ”, journal of economic perspectives 22 : 25 – 44. 15 fernald, j. ( 2015 ), “ productivity and potential output before, during, and after the great recession ”, nber macroeconomics annual 29 : 1 – 51. 16 mokyr, j. ( 2014 ), “ secular stagnation? not in your life ”, geneva report on the world economy, pp. 83 – 89. 17 asdrubali, p., b. sorensen and o. yosha ( 1996 ), “ channels of interstate risk sharing : united states 1963 – 1990 ”, the quarterly journal of economics, 111 ( 4 ) : 1081 – 1110. 18 hsu, p., x. tian and y. xu, ( 2014 ), “ financial development and innovation : cross - country evidence ”, journal of financial economics 112 : 116 – 135. 19 kremer, m. and a. popov, ( 2018 ), “ financial development, financial structure, and growth : evidence from europe ”, special feature a,

the esrb and the ssm regulations already define the key elements of the macroprudential framework, but as the framework is tested and more experience is gained the rules will need to be steadily revised. authorities with a mandate in this area must have well - defined roles and responsibilities, including a distinct set of instruments. current overlaps between instruments should be eliminated, and more flexibility in the macroprudential policy framework should be maintained, so that authorities can implement those measures in a consistent and timely manner, which would require significant changes to article 458 of the crr. a more integrated financial market will support the emergence of new types of risk and also require extending the toolkit with new instruments. for the banking sector, this includes complementing the toolkit with borrower - based instruments ( such as limits on loan - to - value, or loan - to - income ratios ) as well as sectoral buffers and a time - varying leverage ratio add - on so that all aspects of systemic risks can be addressed in the banking union. finally, the mandatory reciprocity framework needs to be expanded so as to ensure the effective mitigation of crossborder spillover effects and regulatory arbitrage across jurisdictions in the eu. 3 / 9 bis central bankers'speeches the significant progress we have made with our banking union needs to be recognised also from the international regulatory framework perspective. a case in point is the g - sib 9 framework, which currently penalises cross - border transactions within the banking union by attaching a higher systemic risk score to banks with more transactions of that kind. this goes against the very rationale of the banking union, as it reduces the incentives for cross - border transactions and risk diversification, thus making banks more vulnerable to local shocks. at the same time, we also need to remove the remaining obstacles to further integration within our banking union. such obstacles are often due to regulatory fragmentation and ring - fencing of national markets. for example, a number of national options and discretions, such as diverging large exposure rules, are hindering the free flow of liquidity and capital in the banking union and should be harmonised further. turning to other parts of the financial system, we can expect that the cmu will provide further impetus to the growth of market - based finance and may present new challenges to financial stability. additional steps should be taken to strengthen the ability of european regulators and supervisors to address systemic risks stemming from the non - banking part of the