contributions sum up to 100 percent, and a negative contribution corresponds to dis - smoothing of consumption growth. the respective contributions are estimated over rolling ten - year backward - looking windows, based on annual data and applying the asdrubali and kim ( 2004 ) approach enhanced for relative price adjustments in the spirit of corsetti, dedola, and viani ( 2011 ). 8 / 10 bis central bankers'speeches risk - sharing via cross - border ownership of assets increased substantially following the introduction of the euro, smoothing between 30 % and 40 % of country - specific shocks to gdp by the mid - 2000s. but the contribution of capital markets declined substantially during the financial and especially during the sovereign debt crisis. the contribution of credit markets has been lower, and it even became negative during the financial crisis when european banking sector was particularly hit. in the absence of a european supra - national system of taxes and transfers, it is more pressing than ever to boost europe ’ s risk - sharing potential through financial market mechanisms. the risk - sharing benefits of integrated financial markets could in principle be large. another major benefit of the cmu is the contribution to convergent growth among member countries, resulting from the improved circulation and allocation of savings across the union. in this perspective, brexit makes it more crucial that the cmu is effectively implemented and that european growth can avail itself of the services of an integrated financial system. this is particularly true of a cmu focused on stimulating equity financing. indeed, equity and foreign direct investment ( fdi ), and longer - maturity debt in general, are leading to a more resilient form of financial integration. deeper equity markets constitute an unquestionable advantage to the us, notably in relation to the role of venture capital in promoting innovation. for the expansion of such an activity it is important to create a deep equity market that can provide significant returns in successful ipos ( initial public offers ) that can offset losses incurred by failing risky projects. the cmu is aimed at completing the single market for capital by building integrated markets for equity and bond finance. this should be achieved through both regulatory and non - regulatory actions, including the harmonisation of key legislation and policies related to financial products, such as investor protection and bankruptcy procedures. a number of concrete measures are set out in the commission ’ s action plan to underpin the further development of large capital markets in the eu. 4 the same applies to improving financial literacy and to stimulating a shift in

household savings from bank deposits to equity holdings. we need a cmu that is ambitious ; it should come with a roadmap in terms of goals and milestones to be achieved. broad objectives such as deepening financial integration and achieving risk sharing should be matched with specific proposals such as facilitating funding for corporates in general and for smes in particular. key areas such as securitisation, insolvency regimes, and tax legislation need to be prioritised. cross - border barriers to clearing and settlement should be removed. financial stability concerns also need to be addressed, including an assessment of whether additional macro - prudential instruments should be developed. the proper regulation of financial products and supervision of financial entities, such as insurers and pension funds, as well as full transparency of new financial products, should be put in place as they are essential to convincing households to switch to more market - based forms of saving. in this respect, enhanced powers for the european securities markets authority ( esma ) and better coordination with the national competent authorities will help strengthen the implementation and enforcement of rules. conclusion allow me to conclude. the euro area is experiencing a resilient recovery, sustained by monetary policy. outturns for high - frequency data so far this year point to continued momentum. but it is too soon to declare complete success : we have yet to secure a sustained convergence in inflation towards our goal of close to but below 2 % over the medium term. with the recovery underway, we should aim to build euro area resilience to future shocks. in this 9 / 10 bis central bankers'speeches regard, clear progress on cmu will help put in place the right conditions to encourage a greater degree of financial integration in the euro area. this in turn will help dampen the asymmetric effects of future shocks, bolster the effectiveness of monetary policy and enhance the welfare of our citizens. 1 asdrubali, p., sorensen, b. and yosha, o., “ channels of interstate risk sharing : united states 1963 – 1990 ”, quarterly journal of economics, vol. 111, 1996, pp. 1081 – 1110 ; athanasoulis, s. and van wincoop, e., “ risk sharing within the united states : what do financial markets and fiscal federalism accomplish? ”, review of economics and statistics, vol. 83, 2001, pp. 688 – 698. see also del negro, m