within the eu have, on average, half the home bias of conventional bonds. so we have a real opportunity to build a genuinely european capital market from the outset. that ’ s why, in my view, specific initiatives under the cmu action plan should be fast - tracked – even if they are only applied to sustainable finance for now. we need proper european supervision of green financial products with official eu seals, such as the forthcoming eu green bond standard. we need harmonised tax treatment of investments in sustainable finance products to prevent green investments fragmenting along national lines. and we need further convergence in the efficiency of national insolvency frameworks, which may even entail carving out special procedures for green finance. if we succeed, it would not only accelerate the transformation of our economy, but also act as an engine for the cmu project generally, testing and putting in place some of the measures that are needed to advance wider capital market integration. this double dividend is, to my mind, too good an opportunity to pass up. institutional change in europe often takes longer than we expect. but let ’ s show that, once we are committed, this change can happen faster than we ever thought possible. 2 / 2 bis central bankers'speeches

will be rigorous and transparent and will involve private expert firms, such as external auditors, consultants and specialised asset evaluators. their presence, together with the announced “ strong central governance structure ”, will enhance the credibility of the exercise. national supervisors and private firms involved in the assessment will work within the terms of a detailed framework defined by the ecb and their final output will be subject to a central review to assess their quality and analyse their consistency across banks and countries. we of course do not know what the assessment will find. but we trust that the euro area banks are today better prepared to undergo such an exercise. they are much stronger than in recent years. they have significantly strengthened their capital positions and now compare reasonably well with us banks in that respect. in terms of risk - weighted assets, the median core tier 1 ratio of the largest euro area banks currently stands at 12. 7 %, above their american counterparts. the majority of significant euro area banks already comply with the minimum capital requirements of the fully implemented basel iii framework. in terms of leverage – as measured by the ratio of equity over total assets – eu banks may at first sight appear to have lower ratios than their us peers, but as fdic vice chairman thomas hoenig has showed, if the same accounting standards are applied then the median of the leverage ratios of large eu and us banks are quite similar. in terms of absolute nominal size, if we look at the 20 largest banks in the eu and the us, the eu banks now have a capital level approximately 100 billion dollars larger. gabriel jimenez, steven ongena, jose - luis peydro and jesus saurina ( 2012 ), “ macroprudential policy, countercyclical bank capital buffers and credit supply : evidence from the spanish dynamic provisioning experiments ” sveriges riksbank working paper. bis central bankers ’ speeches where euro area banks do not compare so favourably with their us peers, however, is in their low profitability and fragile investor confidence. investors seem to be uncertain whether banks have proper asset valuations and are adequately provisioned. but this is precisely the issue the comprehensive assessment should address – it is an exercise in removing uncertainty by giving investors all the facts. i said some time ago that markets had an excessive negative perception of european banks. in fact, euro area bank share prices, as well as price - to - book ratios, have been rising in recent months in part in anticipation of the assessment.