stop, at least for some time. we need, first, to give a minimum of stability to the regulatory framework ; second, to take stock of the work done and gain experience to evaluate its longer - term effects ; third, and perhaps most importantly, strike a balance between securing the financial system and avoiding rules that would overly penalize risk - taking, without which no growth is possible. at the beginning of this year the group of central bank governors and heads of supervision of the g20 instructed the basel committee to refrain from ‘ significantly increasing overall capital requirements ’ 1 at this stage. the basel 3 package is currently being finalised on this premise. while agreement is not yet assured, i think we are close. let me take this opportunity to say that my firm view is that an agreement is necessary to give certainty to the financial world. the conditions are there and we should not miss the opportunity. assuming such an agreement can be reached, in the field of banking regulation the next few years should be devoted to maintaining the regulatory system, not to overhauling it radically once again ; we also need to review the rules, by checking for any embedded procyclicality or other unintended consequences, rather than establishing further capital requirements. efforts to limit banking risks, however, are only part of the answer. the financial landscape is changing apace. the growth of intermediaries outside the banking sector points to the need for new micro - and macro - prudential tools. work has begun in this area but much remains to be done. furthermore, a host of innovations ( digital currencies, distributed ledgers, peer - to - peer lending, crowdfunding, to name but a few ) have opened new frontiers for financial services and started to blur the boundaries of the financial sector itself. there is great potential for financial inclusion and efficiency gains here, but there are also implications for monetary operations and transmission, as well as new risks to stability, integrity, and end - user protection. this raises issues about the group of central bank governors and heads of supervision ( 10 january 2016 ) ; as stefan ingves, chairman of the basel committee, recently noted, this must be one of the most frequently cited phrases in regulation debates these days. perimeter of financial regulation and the appropriate regulatory and policy measures. the fsb and various standard - setting bodies have already conducted a broad discussion on general themes like definitions, opportunities and risks ; it is now time to turn to discussing concrete policy questions.

road towards the completion of the banking union. indeed, the banking union is still missing two very important pieces : the availability of common public funds to support resolution procedures in the case of ailing banks – the single resolution fund ’ s fiscal backstop – and a common bank deposit insurance scheme, again supported by a common public backstop. these are key ingredients for the overall balance of the new system : in their absence, it would not be easy to counter the views of those who claim that the fiscal backstop should remain a national prerogative and that, therefore, the national authorities should have the final say in all interventions aimed at minimising the overall costs of the distress. furthermore, we should also reflect on how to deal with possible crises of banks for which the existence of public interest, necessary for the initiation of a resolution procedure, is denied. this is the case for the smaller banks, but it may also apply, as it has been recently the case, to banks considered significant within the ssm. indeed, it would be difficult to object to the observation that the current framework calls on these banks to pay into a crisis management system from which they cannot benefit. * * * to conclude, progress on all these fronts – and, more generally, toward a deeper european integration – can be achieved only if we overcome the mutual distrust and prejudice among member countries that have developed in recent years. in doing this, we should strive to give sound and fair application to the principles underpinning the new european rules, preserving the value of banking activity, to the benefit of savers and borrower households and firms. thank you for your attention. designed and printed by the printing and publishing division of the bank of italy