acting as a coordination centre and ensuring the consistency of national policies, making use of the entire range of instruments created by the eu, such as centralising the optimisation of the aggregate ’ s path by monitoring spillover effects on its constituent parts. this is, unsurprisingly, a paradigm shift : it entails moving the focus from financial or regulatory instruments to policies. until now, the eu tended to believe that it was enough to create instruments, as they would induce policies, as was the case of the european social fund and the european regional development fund. however, those same instruments served / induced different policies and consequently, different efficiency levels for both the parts and the whole. this should be viewed from the opposite perspective : instruments do not induce policy optimisation ; policies require and warrant the use of instruments and, as such, they should be employed according to the policies ’ level of consistency with the general interest. the fourth message that i would like to convey is that responsibility for compliance with fiscal rules should lie with an independent entity. national budgets are a matter of common interest, given that the debt sustainability principle is an integral part of the institutional principles enshrined in the treaties. as a constituent rule in the eu, it must be safeguarded while ensuring its independence, technicality and neutrality. i therefore believe it is crucial to establish a central independent entity capable of assessing and issuing reasoned opinions on the fiscal adjustment path followed by member states – a european “ public finance council ”. this “ public finance council ” would gauge national policies ’ compliance with the emu ’ s self - imposed rules, but it would not interfere with political choices, provided that they were compatible with long - term sustainability. this means that if a country prefers to adopt an approach that favours equality over efficiency – defining efficiency as public expenditure yielding returns – it would not be bound by an obligation to follow a sustainability path. however, we must bear in mind that the sustainability path would not be the same. it is crucial to reach a balance between two situations at opposite ends of the spectrum, both of which unfeasible : ( i ) to grow in the future without creating conditions for consensus in the present ; and ( ii ) creating conditions for consensus now, but neglecting future economic growth. the nature and quality of national policies affect a country ’ s potential output and, consequently, the political room for manoeuvre within the rules. any policy measure identified as necessary in the scope

is a necessary but insufficient condition to ensure the existence of a single european financial system, efficiently channelling savings to investment opportunities within the european union territory. given that financing in europe is dominated by the banking system, it must be ensured that banks are granted the possibility of securitising their credits and placing those securities with institutional investors. on the one hand, this would allow european banks torelease funds to finance new investment and to have alternative sources of funding in the capital market ; on the other hand, insurers and pension funds, which currently invest in long - term securities issued outside europe, would have the opportunity to invest in european securities. the development of a european securitization market is hindered by the fragmentation of the fiscal and regulatory frameworks ( capital markets, insolvency, etc. ) prevailing in europe. although the harmonisation of national frameworks within a reasonable time frame is not realistic, it would be advantageous, in particular for smaller countries, to develop an opt - in european scheme that would make it possible to overcome the identified barriers. bis central bankers ’ speeches