: first, a financial market union that elevates responsibility for supervision of banks to the euro area level. second, a fiscal union that reinforces oversight of budgetary policies at the euro area level and also provides some fiscal capacity to support the functioning of the currency area. third, an economic union with sufficient mechanisms to ensure that countries can achieve sustained prosperity without excessive imbalances. and finally a political union that strengthens the legitimacy of emu among euro area citizens and deepens its political foundations. these four building blocks are mutually consistent and coherent, and should be pursued in parallel. i am looking forward to the work on a roadmap that has started. in my view, three issues deserve particular attention : first, we need to move towards a further sharing of sovereignty in the fiscal, financial and economic domains. there can be no shortcuts in establishing a sound and stable emu. second, emu is an integral part of the treaty. this calls on all relevant bodies and actors to engage constructively on improving its functioning, not only at union but also at national level. to call for an impeccable application of the treaty and at the same time refuse closer union mentioned in article 1 of the treaty is inconsistent, to say the least. third, we need to accompany deeper euro area integration with significant progress on democratic legitimacy and accountability. there is no doubt that you and your colleagues – the members of the european parliament, the directly elected representatives of the citizens of europe – will continue to play a central role in the steps towards political union. thank you for your attention. bis central bankers ’ speeches

##imating losses for a particular loan portfolio in a tail event, the firm has gone back to think about how the identified shortcomings fit into their overall risk decisionmaking and management processes. these firms will, on their own, then consider whether changes in other areas are needed. again, i suspect that the line employees in these firms are also hearing a different message and presumably, to at least some degree, will behave in accordance with that message when they encounter risk - management issues not covered specifically by fed communications. needless to say, nothing here is meant to suggest that a focus on compliance is problematic. on the contrary, particularly as applied to areas like antitrust, securities laws, and consumer protection, well - crafted compliance programs are essential. but what we want to see is good compliance, not mere compliance. as in financial risk management, the perceived importance of what appear to be similar compliance efforts can vary greatly across firms. are compliance programs put in place by risk managers or general counsels understood as a kind of background noise that should not drown out the voices urging employees to “ make their numbers, ” or are they seen as reflecting the views and priorities of senior management? a related question is whether compliance with applicable law or regulations is understood to be just that, and that alone. do employees understand their job to be maximizing revenues in any way possible so long as they do not do anything illegal, or do they understand their job to be maximizing revenues in a manner consistent with a broader set of considerations? in the former case, the message is that the law is a constraint to be observed, but that the purposes or values that underlie it have no additional importance for determining corporate activity. it may not be too great a leap from this attitude to a conscious weighing of the profitability of a particular practice that violates laws or regulations against the penalty that would be assessed for the violation, discounted by the probability of enforcement. in the latter case, the message to employees is that constraints on practices or products may be self - imposed as well as external. the potential sources of such internal constraints are manifold. for example, there might be a fear that always running close to the line will inevitably result in swerving over it at some point. or management may worry that reputational harm will result if clients and customers believe the firm is always seeking an advantage over them that, literally or metaphorically, is buried in the fine print. this second concern recalls the much - discussed issue of