##ence of the system. this would provide the institutional framework for the cross - border risk - sharing that europe needs. second, to facilitate cross - border activity and the emergence of pan - european entities, we need to put an end to national ring - fencing. within the banking union, supervisors should be able to grant cross - border waivers for capital, liquidity and large exposures, provided that prudential safeguards are in place. this would lead to more efficient resource allocation and support the emergence of resilient cross - border banks able to provide credit across borders and to offer investors access to diversified products. 5 it would also foster cross - border bank penetration, which would support the credit channel of private risk - sharing. within cmu, a more level playing field would also enhance the capital market channel of risk - sharing. third, we need to mobilise the large existing pool of savings in europe so it can be put to productive uses. today, households keep 35 % of their financial wealth in cash and deposits, around a third in insurance and pension funds, and the rest in shares, funds and bonds. differences in saving behaviours – through banks or through pension funds – suggest that there is potential for savings to be allocated more efficiently within the banking union and for retail investors to participate more actively in capital markets. fostering equity investment by addressing the debt - equity bias and improving financial literacy, for instance, would support the development of an equity culture in europe, which would, in turn, help to finance innovation, growth6 and risk - sharing7, while also increasing the return on savings for households. fourth, we need to continuously review the financial regulatory and supervisory framework to ensure that authorities can monitor and address potential financial stability risks. european firms are relying more heavily on corporate bonds for their financing than they did in the past, and both households and various financial intermediaries are increasingly holding corporate bonds via investment funds. this changing environment might entail new sources of risk as well as different transmission channels of financial instability. robust prudential standards in the nonbank financial sector therefore need to be upheld, and changes to the financial structure need to be reflected in the supervisory framework to avoid risks developing beyond the watch of supervisors. the macroprudential toolkit will also need to be extended to the non - bank financial sector so that the authorities have the means to address risks at the system level. 8 last but not least, we should not shy away from having an open

, for instance, ecb ( 2007 ), “ the role of financial markets and innovation in productivity and growth in europe ”, occasional paper series, no 72, as well as ecb ( 2018 ), financial integration in europe, special feature a : “ financial development, financial structure and growth : evidence from europe ”. 7 ecb ( 2016 ), financial integration in europe, special feature a : “ financial integration and risk sharing in a monetary union ”. 8 see, for instance, “ redesigning europe ’ s financial landscape “, speech by luis de guindos, vice - president of the ecb, at the 6th frankfurt conference on financial market policy, frankfurt, 14 december 2018. 9 in the literature it is argued that in modern times the size, depth and variety of domestic capital markets are key factors in fostering the international role of a currency. see mccauley, r. ( 2017 ), “ the euro and the dollar ”, essays in international finance, no 205, princeton university, november ; hartmann, p. ( 1998 ), currency competition and foreign exchange markets : the dollar, the yen and the euro, cambridge university press ; portes, r. and rey, h. ( 1998 ), “ the emergence of the euro as an international currency ”, economic policy, vol. 13 ( 26 ), pp. 306 – 343 ; hartmann, p. and detken, c. ( 2000 ), “ the euro and international capital markets ”, international finance, 3 ( 1 ), pp. 53 – 94. 4 / 4 bis central bankers'speeches