##ch fur die absehbare zukunft gesichert zu wissen – das ist die entscheidende errungenschaft der wahrungspolitischen saule in der wirtschafts - und wahrungsunion. die zweite saule ist die wirtschaftspolitik. fur diese saule stehen der stabilitats - und wachstumspakt, die ausrichtung der allgemeinen wirtschaftspolitik und die effektive gegenseitige uberwachung der finanz - und wirtschaftspolitik. leider hat diese zweite saule erhebliche defizite offenbart. der stabilitats - und wachstumspakt ist zunachst aufgeweicht und dann verletzt worden, die allgemeine wirtschaftspolitik ist nicht in allen landern auf stabilitat ausgerichtet gewesen, und die gegenseitige uberwachung war oftmals nicht effektiv. die entwicklungen im letzten jahr sind eng mit den schwachstellen der wirtschaftspolitischen saule verzahnt. daher ist die grundlegende herausforderung fur dieses jahr, die wirtschafts - und finanzpolitische saule so zu starken, dass sie tragt. dies erfordert einen quantensprung in der gestaltung und implementierung des stabilitats - und wachstumspakts, und eine stabilitatsorientierte allgemeine wirtschaftspolitik aller lander. wirtschaftliche schwachen und wettbewerbsverluste mussen rechtzeitig korrigiert werden. dazu mussen die mitgliedstaaten erkennen, dass der euro nicht nur eine gemeinsame geldpolitik bedeutet, sondern auch eine stabilitatsorientierte ausrichtung der jeweiligen, nationalen finanz - und wirtschaftspolitik erfordert. diese erkenntnis muss konsequent

yves mersch : appointment hearing as vice - chair of the ecb supervisory board appointment hearing of mr yves mersch, member of the executive board of the european central bank, at the committee on economic and monetary affairs of the european parliament, brussels, 4 september 2019. * * * following my nomination by the ecb ’ s governing council as candidate for the position of vicechair of the ecb ’ s supervisory board, i am grateful for this opportunity to outline the key principles that i intend to bring to the role. i have spent more than 20 years of my career dealing with microprudential supervision in various roles, first at luxembourg ’ s monetary institute and finance ministry, and then as governor of its central bank. during that time i helped to develop the template for modern banking supervision in my country – but i also witnessed the challenges national supervisors can face in a monetary union. this perspective proved vital when i co - led the internal preparations within the ecb for the creation of european banking supervision. today, the single supervisory mechanism ( ssm ) is well established as the single banking supervisor in the euro area. if confirmed as vice - chair of the ecb ’ s supervisory board, i am determined to uphold and strengthen this achievement. in doing so, my approach to supervision will be based on three main pillars. the first pillar is to transition to a more forward - looking supervision. european banking supervision has been instrumental in tackling the legacies of the crisis : since 2014 stocks of non - performing loans, or npls, have declined by almost 50 % and bank capital has increased significantly. but we also have to look to the future. in an environment of weak growth, banks cannot afford large inflows of new npls while clinging to outdated business models. supervision must ensure that sound underwriting standards and adequate provisions are in place, that changing business models are sustainable and that upcoming risks are addressed. the second pillar is to further increase the transparency of supervision. prudential supervision requires a high level of democratic accountability because its measures might have an impact on ( national ) taxpayers ’ money. so the way banks are supervised should be clear and predictable. increased transparency also supports consistency when comparing banks ’ compliance with applicable supervisory principles and practices. it thereby ensures a level playing field and that all supervised institutions are treated equally. moreover, transparent supervisory requirements help to understand banks ’ risks, and anticipate supervisory actions. this in turn would strengthen market discipline. but we need to