identify and prevent the persistent accumulation of financial imbalances at an early stage. this will help ensure a more resilient and viable financial sector. a financial sector that is capable of contributing to sustainable growth. second, it has demonstrated that we urgently need a european framework for the resolution of financial institutions. this should include a clear set of commonly known ex ante rules for bail - in, buffers of ‘ bail - inable ’ assets and depositor preference. regarding the latter, the new framework should place depositors at the top of the creditor hierarchy and ensure that the role of dgs in resolution is limited to insuring eligible depositors. this will contribute to reducing the risks to financial stability by providing legal certainty and predictability to resolution. third, it has revealed the pressing need to establish a single resolution mechanism ( srm ). the srm is a fundamental pillar of the banking union and is a necessary complement to the ssm. this requires a strong authority at its centre which should provide timely and impartial decision - making which minimises the costs of resolution. the srm should have a european resolution fund at its disposal which should have access to a temporary and fiscally neutral public backstop. i thank you for your attention and stand at your disposal for questions. bis central bankers ’ speeches

lower the adjustment costs associated with asymmetric shocks affecting one particular country or region. although considerable progress has been made, much remains to be done. ladies and gentlemen, allow me to also stress the importance of your role in contributing to informing european citizens about the dangers caused by divergences in price developments across countries or regions, which might arise as a result of excessive wage increases or the unsustainable expansion of profit margins at the local level. the more such developments become entrenched in the economy, the more they will lead to a loss in competitiveness and, eventually, to a loss in output and employment in the respective economies. clearly, our efforts to make the euro a success will require all of us to master – at home – the challenges which i have outlined. however, the european union, and also the euro area, face an important external challenge – and this brings me to the second topic of my presentation : the eu accession process and the subsequent enlargement of the euro area. the fact that your committee has established a liaison group with applicant countries bears witness to the substantial implications which enlargement will have not only for a central bank but also for representatives of regional and local authorities. as you are well aware, to date 12 countries from central, eastern and southern europe are involved in negotiations to become members of the eu and, ultimately, also of the euro area. the integration of such a large number of new countries into the european union – which would imply almost a doubling of the current number of member states – will be an enormous task for both sides and be without a precedent in history. as i have just said, accession to the eu also entails significant implications for the economies of the accession countries themselves. for them, the main priority is indeed to foster the convergence process with the eu, both in real and in nominal terms. thus, accession countries are aiming to achieve the european union's standard of living, while at the same time seeking macroeconomic and financial stability. this process will entail profound and comprehensive adjustments in their real economies as well as in the careful design of sound economic policies. undoubtedly, significant progress has already been made in this respect. a substantial reallocation of resources, a strong reorientation of trade links towards the eu, a complete institutional overhaul and a sizeable development of the private sector are the most obvious signs of systemic change. however, these achievements should not give rise to complacency but rather be taken