, it would be both dangerous and illusory to want to change the rules – rather, let ’ s respect them. but at the same time, we should consider the quality of public spending : in order to boost potential growth, in the long term, expenditure on investment and on our future are vital, including on education and training and, of course, new technologies. this is true of national budgets, but we could amplify the effect through a euro area investment budget. this budget could be used to finance, for the benefit of all countries, certain “ common goods ” such as digital technology, energy transition, security, and external border protection. finally, my third idea begins with a question : how to deal with stabilisation? in other words, how to deal with the shocks that can have a brutal effect on certain national economies? private risk 2 / 3 bis central bankers'speeches sharing through the capital markets union and the financing union that i mentioned earlier, is part of the answer. in the united states for example, the stock market is capable of absorbing around 40 % of a state - specific shock. but that is not enough and it is absolutely vital that we go further still. otherwise monetary policy may bear too much of the burden during a future recession, which would be dangerous – monetary policy should not be the only game in town. in the euro area, we therefore need better economic policy coordination. countries will continue to be responsible for their economic policies, but we can aim for a better collective economic strategy with more reforms in countries where they are needed and with more fiscal or wage support in countries with room for manoeuvre. this collective strategy could be supplemented by enhancing the european stability mechanism to transform it into a european monetary fund ; this would require that the scope of its actions be expanded to include a genuine crisis prevention role and that its governance be amended. otherwise, it would be a simple change of window dressing. * * to conclude, i would like to mention another reason why 2018 must be europe ’ s year : our international environment, with the prospect of brexit and the presidency of mr. trump in the united states. confronted with the challenges of globalisation, europe ’ s twofold message is essential. first, our common social model – die soziale marktwirtschaft – combines a high level of public service, relatively low levels of inequality and a strong intensity of social dialogue ; it is the ideal response to the debate on inequality

need robust recovery and resolution arrangements for ccps, to preserve financial stability in all circumstances. before i leave you to discuss this complex issue, i would like to offer a few thoughts : – the cornerstone principle of resolution is always financial stability : this should be achieved through the continuity of ccp services when possible, but not at the expense of the financial survival of ccp members and clients. – the permanent cost of such a regime should be assessed carefully in order to preserve incentives in favor of central clearing. ccps already have properly sized financial resources and a sound business model that must be preserved. – resolution arrangements should balance predictability for ccp participants and flexibility for the resolution authorities, whose task to preserve financial stability in the most extreme circumstances should not be hampered. – and lastly, cooperation between authorities and consistency at the international level are key to ensure efficient resolution planning and resolution actions, and to avoid regulatory loopholes and arbitrage. this conference is indeed illustrative of the spirit for further international cooperation in this field. thank you for your attention. i wish you a very fruitful conference. bis central bankers ’ speeches