different rules for corporate governance contribute to fragmentation. these issues warrant consideration to facilitate financial reintegration. the single resolution mechanism as an essential complement another essential element in building a more integrated european banking market is greater harmonisation of how non - viable banks are resolved. this requires a consistent legal framework between countries and a single resolution mechanism to enforce that framework. the first part has already been agreed by governments ; the second part, the srm, needs to be pursued as a matter of urgency. a robust srm would encompass all banks established in member states participating in the ssm. it would have at its centre a strong and independent single resolution authority that can act evenly across countries and take decisions in the european interest. and it would have adequate powers, tools and financial resources to resolve institutions swiftly and effectively. the key to an effective resolution regime is that it creates legal certainty, consistency and predictability, thus helping to avoid ad hoc solutions. to this end, there are two points where i think more certainty is needed. first, while the new eu resolution framework provides the appropriate resolution toolbox, it would be better to have it available right from the start of the srm. i therefore support implementing the bail - in tool well before 2018. second, to price risk properly, investors need to see a clear pecking order in resolution financing – running from capital write - downs and bail - in to use of a bank - financed single resolution fund. however, it would be difficult to make such a pecking order credible without a public backstop for the single resolution fund for exceptional cases where its resources are exhausted. otherwise, investors may suspect that governments would at some point be forced to step in again. such a backstop would still result in the private sector paying as any borrowing by the fund would have to be repaid, if needed through ex post levies on the banking sector. in other words, the future system would not be about bail - outs or mutualisation – it would be fiscally neutral ; the taxpayer would not pay. conclusions let me conclude. i have discussed today the benefits of a european perspective to our current challenges. this is not the perspective of idealists. rather, in a closely integrated monetary union, it is the perspective of realists. a european perspective is firmly enshrined in monetary policy. and it is equally enshrined in our approach for establishing the ssm. we will overcome fragmentation to create a truly integrated financial market. there is still

back to this. one concern is that low interest rates erode people ’ s savings. another is that low interest rates create risks for financial stability. a third is that they reduce the incentives for governments to reform. allow me to address each of these concerns in turn. first, i understand the concerns about a prolonged period of low returns on savings. but it is important to understand that interest rates are low because the economy is weak. if we raised rates, we would further depress the economy, people would lose their jobs, and then their savings would be lower for longer. bis central bankers ’ speeches by keeping interest rates at a level that supports the recovery, we should see higher interest rates for savers going forward. moreover, the interest rate that matters most to long - term savers is not the main ecb rate, but the rate on safe long - term investments – in germany, that is long - term bunds. it is wrong to think that these rates are solely determined by the ecb. since the crisis, more powerful factors have been at play. in particular, the low return on long - term bunds was largely explained by investors seeking safety as other parts of the euro area struggled. second, low interest rates can over time threaten financial stability, but we do not see any evidence of this at present. if we do see low interest rates creating localised risks, then local tools should be used to address them. in particular, national authorities should make full use of macro - prudential tools that they have available. the third concern is that low interest rates undermine incentives for reform in the euro area. certainly, monetary policy always has side effects – this is inherent and unavoidable. but one should never forget that the ecb acts for the euro area as a whole in line with our mandate. i have already reacted to the nationalistic tone that this concern has provoked in some recent commentary. in their deliberations and decisions, governing council members are neither german, nor french, nor spanish, nor italian but acting as europeans in pursuit of a european mandate. to maintain the right incentives for economic policies, countries need to strengthen their frameworks for economic governance. important steps to strengthen budgetary discipline have already been undertaken. but several countries are further behind in implementing structural reforms. it is therefore high time to bring this area under closer european governance. the single supervisory mechanism let me now turn to the second part of my remarks today – the creation of the