in europe was fragmented. national bodies which supposed to supervise cross - border banks had no effective tools to resolve conflicts. the eu level financial services committees could only give advice and issue nonbinding guidelines and recommendations. the new consolidated supervisory framework, in place since the beginning of this year, reflects the single market in financial services : the european supervisory authorities ( esas ) are three authorities created for the european banking sector ( eba ), insurance and occupational pensions ( eiopa ), and capital markets ( esma ) the european systemic risk board ( esrb ) is developing the tools necessary to warn and, if appropriate, make recommendations concerning systemic risk. the esrb constitutes the macro - prudential complement. it is chaired by the president of the ecb. 2. reform of the stability and growth pact the stability and growth pact ( sgp ) will be reformed to improve the surveillance of national fiscal policies and apply enforcement measures at an early stage to ensure fiscal sustainable : less room for discretionary decisions and more “ automaticity ” in the application of the preventive and corrective arm of the stability and growth pact ( burden of proof ) rapid strengthening of national fiscal rules – to facilitate implementation of the stability and growth pact clearer rules for the reduction of debt, especially in euro area countries earlier application of financial sanctions 3. improved economic surveillance in europe the implementation of sound macroeconomic policies is the best insurance. a new macroeconomic surveillance framework will be established to check deviant behavior at an early stage, thus preventing fiscal imbalances before they emerge. surveillance of competitive indicators is of the essence : new framework for the prevention and correction of macroeconomic imbalances early warning indicators and economic analysis of countries to identify where imbalances might emerge, the european council may make appropriate policy recommendations to the country. if serious macroeconomic imbalances are identified, the affected country must submit a plan to implement the recommendations. the application of such a plan will be monitored possible financial penalties in case of serious macroeconomic imbalances and lack of implementation of the recommendations 4. crisis management prudence and prevention are important. yet another crisis cannot be excluded for good. therefore, a permanent crisis management facility has been agreed upon, that builds on the bis central bankers ’ speeches ad hoc stability facilities established in 2010 to dampen contagion and preserve financial stability. current crisis mechanisms – the eu countries and the imf granted greece financial assistance of 110 billion euros. – european financial stability facility ( efs

or capital. the fact that the euro area is not considered as a single jurisdiction may result in applying higher capital buffers to euro area g - sibs. while the institutional underpinnings of the banking union do not yet meet the requirements of a genuine single financial market, the creation of the ssm has been a leap forward in the establishment of a coherent regulatory framework. one of the first priorities of the supervisory board has been to promote integration through harmonized implementation of options and national discretions ( onds ), thereby evening the level playing field in the euro area. regarding liquidity requirements, the single supervisory board can grant waivers at national as well as cross - border level on a case - by - case basis. in the current institutional context, where the free flow of liquidity within the same banking group but across border could be impeded, a prudent supervisory approach has led the ecb ’ s supervisory board to still maintain a floor on the liquidity requirements of significant subsidiaries. overall, the banking landscape still resembles too much a collection of banking systems highly exposed to their domestic economies, with limited cross - border private risk - sharing. at the same time, one should recognise that the banking union is both an objective and a process of fundamental structural changes in the euro area ’ s financial architecture. the next steps are 1 / 2 bis central bankers'speeches clearly set out in the ecofin roadmap to complete the banking union. it is now urgent to agree on an ambitious timetable for its implementation. 2 / 2 bis central bankers'speeches