narodna banka slovenska, imricha karvasa 1, 813 25 bratislava, slovak republic www. nbs. sk strategies, and they also changed how slovakia was perceived within the european union. as was noted today, the road to fulfilling the criteria was a little bit bumpy. slovakia had previously been on a floating exchange rate, so the major issues included the sustainability of the inflation criterion and the exchange rate pass - through to prices. but the discussions were frank and turned out successful. in terms of the technical issues and the technical changeover, the euro adoption was much less bumpy. i ’ m glad that although we took some its profits, the banking industry is very happy with the euro adoption. the same goes for the citizens and firms, and no major political party is explicitly against it, either. the euro adoption in slovakia is praised mainly for supporting exchange rate stability, ease of travel, and business. that is pleasing, because it has not been the case in each country that adopted the euro. several participants stressed that slovakia could be a role model for countries joining the euro in the future. it was good to hear this from distinguished international economists, and even better to hear it from a czech economist. now the question is how we should look at the euro per se. the euro is not a guarantee of prosperity, not something that automatically makes you richer once you adopt it. the common currency is not a blank cheque. it ’ s very important to bear in mind that there are good examples and bad examples. it is not set in stone whether you will prosper or struggle after entering the euro area. other policies are extremely important. when a country joins the euro area, it gives up the exchange rate as a demand stabilisation tool, so it should prepare other policies to fight against asymmetric shocks, including macroprudential, fiscal, labour market and other structural policies. today we saw a very lively discussion about the future of the common currency. i really liked the point that we should not see the euro as a blame game between european institutions and member states. everybody should understand that it ’ s kind a of a shared responsibility. we should try hard to figure out how to reform our governance framework in order to incentivise european institutions, as well as the member states themselves, to see the euro as a common concern. we talked a little bit about the potential next recession and crisis. we heard how the policy space

course “ stress ” a wide range of assets as part of the stress tests : sovereign bonds will be among them. to ensure the credibility and rigour of the comprehensive assessment, backstops should be well specified and in place as soon as possible. the pecking order should be first private sources, then national public backstops and, as a last resort, european instruments. turning now from supervision to resolution, i understand you have reached agreement with the council on the bank recovery and resolution directive. let me again strongly welcome this agreement, as it is an important step towards to the completion of the banking union. bis central bankers ’ speeches however, for the credibility of the banking union, another step must be taken too : the ssm needs a strong and credible single resolution mechanism as its counterpart. responsibilities for supervision and resolution need to be aligned at the european level. thus, i urge you and the council to swiftly set - up a robust single resolution mechanism, for which three elements are essential in practice : a single system, a single authority, and a single fund. we should not create a single resolution mechanism that is single in name only. in this respect, i am concerned that decision - making may become overly complex and financing arrangements may not be adequate. i trust that the european parliament, together with the council, will succeed in creating a true banking union. thank you for your attention. i am now looking forward to your questions. bis central bankers ’ speeches