significantly. this is important because a shorter time to recover collateral brings the market value of non - performing assets closer to a level at which transactions can take place, meaning bank deleveraging can accelerate. the ongoing work towards a capital markets union ( cmu ) is an opportunity to accelerate progress on all fronts. a true cmu should aim to harmonise insolvency regimes and improve bis central bankers ’ speeches their overall quality by converging towards international best practices. that should in turn also help expand secondary markets for distressed debt, helping banks get npls off their books more easily. and if cmu is successful in developing european markets for sme assetbacked securities, banks will be able to diversify credit risks from lending to smes more easily, strengthening credit supply. finally, if we are to truly underpin confidence, it is important that, even while dealing with more pressing priorities, we do not lose sight of the need to complete our monetary union. in that context several steps taken by the commission are steering the process in the right direction. but what is also important for confidence is that those steps form part of a longerterm vision that removes fragility from our union. in sum, the combination of our monetary policy measures on the demand side, coupled with structural reforms on the supply side, goes a long way towards creating the conditions for a genuinely structural recovery. monetary policy and structural reforms together support demand, deleveraging and confidence, all of which are key for increasing investment. but when it comes to actually implementing the reform agenda, in many countries of the euro area hesitation seems to prevail over determination. certainly, we need to bear in mind that the necessary changes are on such a scale as to be unachievable without major consensus. but we also need to bear in mind that delays in making important structural reforms, which make a country more prosperous and more able to face today ’ s challenges, may sometimes have political reasons, but never economic ones. bis central bankers ’ speeches

trillion, insurance companies and pension funds constitute a large segment of the institutional investor space and they are therefore important for financial system stability. in particular, they play a major role in fixed income markets, also as providers of long - term funding to banks and the public sector. if we look at the situation within the euro area, the role of insurers and pension funds has been increasingly important as the size of the euro area sectors has grown rapidly over the http : / / www. bis. org / publ / cgfs44. pdf bis central bankers ’ speeches last decade. it should however be noted that the prominence and asset allocation strategies of these institutional investors is very different in different euro area countries. the investments of insurers and pension funds have created strong and important interlinkages with sovereigns as well as banks and other financial institutions. insurers and pension funds, with €1. 1 trillion invested, hold almost 20 % of the debt securities issued by euro area governments, which make them an important provider of governments ’ funding. euro area icpfs are also providing funding to other sectors. after governments, the euro area icpf sector has the second biggest debt securities exposure to euro area monetary financial institutions ( mfis ), a sector that consists, in particular, of credit institutions. euro area insurance corporations and pension funds hold about €600 billion of debt securities issued by euro area mfis, which represents around 12 % of the total mfi debt securities. most of the time, given the typically long - term investment horizons of insurers and pension funds, they are a source of stability in financial markets. in current discussions in different fora about systemically important financial institutions, i believe that it is therefore important to distinguish between “ systemically important ” and “ systemically risky ” financial institutions. a financial institution can in my view be important for the financial system even if it does not pose direct threats to it. i believe most insurers and pension funds fall into this category. they are unlikely to trigger financial instability but it is crucial that they maintain their important role in financial markets, an in particular as a source of long term funding in fixed income markets. 2. changes in international accounting standards and in regulatory front it is important to know that current regulatory standards and requirements differ between eu countries. also, the timetable for the implementation of future regulatory changes remains in a state of flux. it is therefore legitimate to ask whether we can draw