challenges ahead. advancing cmu should be a critical political project for the new european commission. it should go hand in hand with strengthening the resilience of the non - bank financial sector as it consolidates its importance in financing the eu's real economy. at the same time, europe remains primarily bank - based. and completing the banking union remains a priority. a single capital market needs to come in addition to, and not 3 / 4 bis - central bankers'speeches instead of, a complete banking union. setting up edis should be high on the agenda in the next eu legislative term. it is essential for depositor confidence and for ensuring a level playing field for banks. both the capital markets union and the banking union should be viewed within the broader context of the european project. enrico letta's recent report2 rightly considers the single market as central to financing strategic goals, competitiveness and the future of the eu. removing existing barriers within the market for goods and services and advancing in the three strategic sectors that were previously excluded from the single market – namely financial services, energy, and telecommunications – will allow us to benefit from the full scale of the market. the single market for goods and services is essential to attract investment, make our economic and monetary union more resilient and support the eu's role as global player on the international stage. at the same time, state aid procedures must guarantee a level playing field and be compatible with the single market. lastly, a permanent eu central fiscal capacity remains essential to the european project. it would enable us to tackle geopolitical and economic challenges more effectively. and by supporting investment in strategically important areas, generating economies of scale and raising productivity across the bloc, it would help to improve the welfare of european citizens while further enhancing financial integration in the eu. 1 ecb ( 2024 ), statement by the ecb governing council on advancing the capital markets union, 7 march. 2 letta, e. ( 2024 ), " much more than a market : speed, security, solidarity – empowering the single market to deliver a sustainable future and prosperity for all eu citizens ", institut jacques delors, france, 27 april. 4 / 4 bis - central bankers'speeches

ric battellino : some comments on bank funding remarks by mr ric battellino, deputy governor of the reserve bank of australia, to the 22nd australasian finance & banking conference, sydney, 16 december 2009. * * * i would like to thank michael davies, anna brown and tegan hanrick, who undertook the research for this talk. one of the widely drawn lessons from the financial crisis is that banks should source more of their funding from deposits and less from short - term debt markets. i want to spend some time today talking about this, focusing in particular on : • how significant are the benefits of such a shift? • how feasible is it for banks to shift their funding sources? • what is the impact on banks ’ cost of funds? and • what are the implications for the level of interest rates? bank funding banks in australia have reasonably diverse funding bases : deposits account for 43 per cent of funding, split fairly evenly between households and businesses ; domestic capital markets provide a further 19 per cent of funding ; and foreign capital markets 28 per cent. securitisation and equity account for 3 per cent and 7 per cent of funding respectively ( graph 1 ). graph 1 since mid 2007, the share of banks ’ funding that has come from deposits has risen by 5 percentage points, with increases in both household and business deposits. banks have used these funds to replace some of their short - term capital market debt. the increased use of deposit funding has been evident in both the major banks and in the regional banks. the foreign - owned banks, in contrast, have experienced a fall in the proportion of funding coming from domestic deposits ( graph 2 ). graph 2 how stable are bank deposits? assessing the relative stability of banks ’ various funding sources is not straightforward, as there can be significant variation even within each category of funding. for example, government - guaranteed deposits are “ stickier ” than non - guaranteed deposits, household deposits tend to be stickier than corporate and institutional deposits, while internet deposits are less stable than other at - call deposits. deposits from corporates and other financial institutions are unlikely to be much more stable than short - term debt, particularly in a crisis. offshore capital market funding can be less stable than domestic capital market funding, as during crises investors often have a strong home bias. the behavioural maturity of a given funding source can also be very different from the contractual maturity, especially during financial crises. it is the behavioural maturity that matters most, and during