fomc members and other participants ahead of each fomc meeting. at present, the most recent year for which these materials are available on the site is 2011. the “ monetary policy strategies ” portion of the bluebook ( and, later, the tealbook ) contains prescriptions from interest rate rules. - 4kohn noted that policy rule prescriptions served two functions : as a “ benchmark for the stance of policy ” and “ to structure thinking about the implications of incoming information for the direction of policy action. ” 9 these two functions continue to be important : policy rule prescriptions provide a useful starting point for fomc deliberations and a convenient way of organizing alternative arguments about the appropriate policy decision. policy rule prescriptions, particularly prescriptions that are obtained from a dynamic model simulation, also help policymakers take to heart a key message of the literature on policy rules - - namely, that monetary policy decisions should concern the appropriate path for the policy instrument and not merely the current setting of that instrument. kohn also observed, however, that “ in truth, only a few members look at this or similar information regularly, and the number does not seem to be growing. ” that state of affairs has probably changed in the two decades since kohn wrote. it is clear from transcripts in the public record that rule prescriptions have frequently been cited at fomc meetings. 10 the prominence that interest rate rules have achieved in federal reserve policymakers ’ analysis of monetary policy was underscored by chair yellen in her speech at stanford university earlier this year. 11 further, as is clear from taylor ’ s econometric derivation of his 1993 rule, actual monetary policy decisions may - - and probably should - - exhibit systematic patterns that can be described as a rule. in fact, as i have already noted, one attraction of the 1993 see kohn ( 1999, p. 195 ). the first of these functions of policy rule prescriptions was one i also had highlighted. in fischer ( 1994, p. 289 ), when considering mccallum ’ s ( 1988 ) proposed rule for monetary base growth, i described it as “ a useful benchmark against which to judge policy. ” searchable transcripts of fomc meetings up to 2011 are available on the board ’ s website at https : / / www. federalreserve. gov / monetarypolicy / fomc _ historical. htm. see yellen ( 2017 ). -

are fully aligned with its european financial stability mandate. a second reason why banking union is essential to monetary union is that it supports the implementation of the single monetary policy. the even transmission of monetary policy across all member countries of the euro area requires a level of financial integration that dirk schoenmaker ( 2011 ) “ the financial trilemma ” in economic letters, 111, pp. 57 – 9. bis central bankers ’ speeches ensures well - functioning cross - border money markets. yet we have seen during the crisis that without a euro area - wide approach to financial governance, financial markets can end up re - nationalising. a strong banking union can help mitigate several sources of this fragmentation. a single supervisor should enhance transparency and thus increase trust in cross - border lending, while supervisory ring - fencing or national asset - liability matching would no longer be relevant given the ssm ’ s european focus. in addition, an effective single resolution mechanism would help attenuate the infamous bank - sovereign nexus. sovereigns would have less ability to intervene in failing banks, thus allowing bank risk to be better separated from sovereign risk. the third reason that justifies the banking union has to do with the effects of unsupervised cross - border lending on real economic developments. contrary to the “ it ’ s mostly fiscal ” view of the crisis, 2 financial sector developments largely explain the build - up of unsustainable current account and competitiveness positions in peripheral countries before the crisis. the current account deficits in most peripheral countries were in fact led by huge capital inflows implying capital account surpluses. the exposures of banks from core to peripheral countries more than quintupled between 1999 and 2008. competitiveness losses were simply the mechanism that connected the capital surplus and the current account deficit – that is, an appreciation of the real exchange rate caused by economic over - heating. as john williamson explained long ago it is impossible to have “ an immaculate transfer ” from capital inflows to current account deficits. 3 national supervisors found it impossible to contain these developments because they had to respect the single market rules and lacked the macro - prudential tools to offset the effects of large capital inflows. but by creating supervision at the level of market, banking union offers a possibility to better pre - empt such developments in the future – and therefore to better protect the real economy, growth and employment. the ssm and the practice of banking in europe let me now turn to the