property rights and therefore has to be given full democratic legitimisation at the right level. we believe that level is the european parliament. we expect the discussions to be finalised soon. i mentioned above the eba, and some of you may be wondering what the creation of the ssm will mean for this authority. in my view, the ssm will in fact be very positive for the eba, for two reasons. first, the eba will remain responsible for developing regulatory policy and technical standards that will form the basis of a single rulebook for banks across europe. the creation of the ssm should help this pro - cess, as having a significant number of countries participating in the ssm will reduce the scope for coordination failures, thus making the eba ’ s coordination function easier. at the same time, the interests of non - ssm members will be protected by double - majority voting : for a vote to pass, there will have to be a majority by voting weight of all eu members, plus a simple unweighted majority of the euro - zone " outs " and the " ins ". second, the eba is currently developing a supervisory handbook which reflects best supervisory practices across the eu. the ecb is cooperating closely with the eba to ensure that its own supervisory manual and the eba handbook are fully consistent. here again, the existence of the ssm should help the eba ’ s work, as all ssm members will naturally converge in their supervisory practices. resolution let me now turn to the other key element of banking union, which is a single resolution mechanism operating under a single legal framework for resolution. looking at the us financial sector shows the value of a strong and clear resolution regime. the fdic has resolved around 480 smaller banks since the start of the crisis, and it is probably no coincidence that there a few concerns there about “ zombie banks ”. dodd - frank has created a similar resolution framework for larger banks, strengthening market discipline and reducing distorted incentives linked to “ too big to fail ”. this is what we should be aiming for in europe : we cannot afford to have a regime that is too weak or too complicated. the process of building a stronger resolution framework has now begun with the recent agreement by the ecofin council on the bank recovery and resolution directive ( brrd ), which now needs to be agreed with the european parliament. overall, i welcome the council general approach and hope that the trialogue process with european

agency with full decision - making powers. if this is not feasible in the short run, a second - best option would be to use the esm for this purpose for an interim period. conclusion let me now conclude. there is no doubt that the banking system in the euro area is suffering from a confidence problem. investors remain unsure about the health of banks ’ balance sheets ; about the rigour of their supervision ; and about the capacity of fiscally - constrained countries to resolve banks that are no longer viable. this is why advancing with banking union is such an urgent priority for the euro area. it is essential to build trust in the banking sector ; to increase transparency over asset quality ; and to ensure that banks that need to be wound down, can and will be. from the perspective of the ecb, it is also indispensable to reintegrate financial markets and so to restore the even transmission of our monetary policy across the euro area. the progress made so far has been impressive, by any measure. the ssm is a milestone in european integration. but this is no time to rest on our laurels. we cannot afford a half - baked banking union. so i hope that, as of tomorrow, policy makers will now take up with urgency the task of building a strong srm. thank you for your attention. bis central bankers ’ speeches