for allocating tools, clarity in the division of responsibility and in legal status. this is problematic as it has contributed to delaying measures that can counteract the high and growing household indebtedness. in their evaluation, goodfriend and king point out that both the mandate and division of responsibility for macroprudential policy are in need of review. i agree. without going into more detail about their concrete recommendations, i can see that, based on a socioeconomic efficiency perspective, it would be appropriate to utilise the expertise, experience and resources in the macroprudential policy area, possessed by the riksbank in its capacity as the central bank, in a better way than is currently the case. there are many different ways of doing this, of which, from both an international and national perspective, the most efficient in the long run would probably be to merge the riksbank and finansinspektionen. this would gather our skills and expertise together and strengthen sweden ’ s voice internationally. this is certainly a far - reaching change, the collective effects of which would most definitely need to be analysed very thoroughly. it is not in line with the current structure, but when the world around us is changing, our central agency structure sometimes also needs to do the same. at the beginning of the 1990s, the bank inspection board was merged with the private insurance supervisory service into finansinspektionen. in the majority of eu member states, the central bank and banking supervision are nowadays under the same roof. there are of course other less far - reaching solutions that would be possible if we wanted to improve our swedish macroprudential policy structure. regardless of the solution chosen, each has its specific challenges as regards governance and accountability. but having a well - functioning and effective arrangement for macroprudential policy is extremely important for sweden. what the best arrangement might be is something i hope the riksdag will reflect on in conjunction with the planned review of the sveriges riksbank act. the time this will take is certainly beyond my active time. my focus is on what is good for sweden. the whole of sweden ’ s welfare is built on the endeavour to increase productivity. this is clearly true within the private sector and it would be strange if this endeavour did not also lead to some form of structural transformation as regards public sector regulation and bis central bankers ’ speeches oversight of the financial system, especially in light of our large,

banks that have more geographically diversified loan and deposit portfolios are more resilient to local shocks and can keep their lending activity more stable. we must hence continue enhancing the conditions for cross - border banking in the euro area. the first step is to reduce the legacy non - performing loans on banks ’ balance sheets which have hampered cross - border lending and m & a transactions over the past few years. 6 that would then pave the way for the completion of the banking union, which we need to reinforce in order to boost confidence in the resilience of the whole financial sector. financial market fragmentation may be exacerbated by perceived or actual differences between the national safety nets for banks which undermine the banks ’ capability and willingness to expand their cross - border activities. the introduction of a common and credible fund for the single resolution mechanism ( srm ) would inspire confidence that banks can be resolved more efficiently, regardless of their location. likewise, the creation of a european deposit insurance scheme ( edis ) would enhance depositor confidence throughout the euro area and create a level playing field for banks. the main benefit of edis is that it will generate confidence in the financial system as a whole. provided that the standards on minimum requirements for own funds and eligible liabilities ( mrel ), total lossabsorbing capacity ( tlac ) or other risk reduction measures are not eroded, edis will probably never be deployed at all. at the same time, we should not fail to mention that especially smaller institutions have next to no experience in accessing capital market funding. this makes it more difficult to rigorously apply the mrel requirements. moreover, the introduction of such security mechanisms at european level could give national governments less incentive to restrict the free flow of capital and liquidity ; this would in turn promote cross - border activity. but edis must be incentive - compatible. its introduction must not result in any retrospective sharing of the burden of legacy non - performing loans. and in order to avoid systematic transfers between banking sectors, the banks ’ contributions to the fund should be structured to reflect banks ’ risk appetites. strengthening the institutional architecture of economic and monetary union these economic and fiscal reforms are essential in order to make the euro area more resilient. however, they cannot fully prevent the risk of severe economic shocks. in the future too, effective crisis management will be indispensable to protect the member states from serious imbalances. in this respect, i am very much in favour