side of the atlantic, the top 1 % of banks hold less than 50 % of excess liquidity. and on the right - hand side you can see that the ten largest banks in the euro area hold just a little more than a quarter of excess liquidity, compared with almost 70 % in the united states. at face value, the euro area ’ s more even distribution of liquidity suggests that it may be less likely to experience an episode of high interest rate volatility. but there are two features – one of them specific to the euro area – that warrant caution. the distribution of excess liquidity and the two - tier system the first feature relates to the distribution of excess liquidity within and across euro area jurisdictions. on the left - hand side of my next slide you can see that banks ’ excess liquidity is often much less evenly distributed than at the country level. in italy, for example, the top ten banks together hold 80 % of excess reserves – a concentration level that is, in fact, higher than in the united states. in france, the top 10 banks hold 70 %. on the right - hand side you can see that excess liquidity holdings in the euro area are also highly concentrated in just a few countries. such concentration levels are, in principle, of little concern to policymakers in the presence of a deep and active money market across the euro area – that is, as long as banks with excess liquidity holdings are willing and able to smooth liquidity shortages elsewhere in the system. if there is fragmentation, however, then temporary spikes in interest rates are also possible in the euro area, despite the remarkable excess liquidity levels we are currently seeing. in other words, in the euro area, compared to the united states, it is fragmentation rather than concentration that may make liquidity supply less elastic. the recent introduction of a two - tier reserve remuneration scheme for the excess reserves of euro area banks provides an interesting showcase for just how fragmented our money markets remain today. the scheme allows banks to deposit a pre - determined quantity of excess liquidity – their exemption allowances – at a rate higher than the deposit facility rate. to see the effect of the scheme on money markets, it is important to recall that exemption allowances are allocated as a multiple of banks ’ reserve requirements. this allocation scheme has led to some banks receiving allowances that are higher than their excess liquidity holdings. specifically, ecb staff calculations suggest that around one - third of exempt

set of responsibilities for which the ssm will draw extensively upon the expertise of national supervisors. the basis for ssm activity will be, as for any other supervisor in the eu, the single rulebook. but this is at a very high level. embedded will be the ecb supervisory manual to install a single supervisory approach with sufficient granularity to overcome a fragmented regulation. at the moment it appears that the ecb will directly supervise approximately 130 banks that are found to be “ significant ” according to the criteria laid down in the ssm regulation. 5 this is less than 5 % of all active euro area banks which are our counterparts in monetary operations. nevertheless, these cover around 85 % of the total banking assets. what about all the other banks? would it be realistic – or even desirable – for the ecb to supervise 6, 000 additional credit institutions? given also the wealth of expertise at the national level, and the advantages stemming from proximity in supervision, the answer is clearly “ no ”. an efficient decentralisation of supervisory activities within the ssm will bring about effective decision - making. but does a “ two - tier system ” imply different treatment? no. the difference between the two groups of banks will concern only the degree of centralisation of supervisory action within the ssm. the “ singleness of the ssm ” is ensured by applying the same common supervisory approach to all banks : • first, the supervisory manual will be binding for all banks under ssm supervision, although some alleviated reporting might be envisageable for less significant institutions. see mersch, y. ( 2013 ), “ a regime change in supervision and resolution “, speech at european supervisor education ( ese ) conference, frankfurt, 26 september 2013. the methodology was devised by the ecb. included are at least ( i ) those banks having a total value of assets of more than €30 billion, ( ii ) those banks representing more than 20 % of domestic gdp ( unless less than €5 billion in assets ), ( iii ) the three most significant banks in each country and ( iv ) those banks receiving direct assistance from the efsf / esm. furthermore, the ecb can, at any time, decide to exercise direct supervision of any other bank if considered necessary. bis central bankers ’ speeches • second, the national supervisory authorities will have to comply with ecb regulations, guidelines or general instructions ; • third, the ecb will have access to all data of all