is not a sufficient reason for dismantling one of our most successful sectors. moreover nationalisation has been tried in many countries and its record is poor. it may reduce the risk of shocks but generally only at a heavy cost in misallocation of resources ( and usually a continuing drain on the public purse ). in my view it should only be a very last resort. the aim of the game should be to manage the system so that society can enjoy the gains of a flourishing financial sector – the efficient allocation of resources and transfer of risk – whilst minimising the threats to economic stability. so we need to have effective systems not just for preventing crises but for dealing with bank failures if and when they happen. the collapse of securitisation markets in august 2007 and the failure of northern rock revealed gaps in the uk ’ s arrangements, with the benefit of hindsight, the main problem was not the handling of the initial rescue – although the tripartite ’ s footwork may have owed more to john sergeant than fred astaire. but i don ’ t think anyone believes now that the business could have been saved. it was in terminal difficulties and it was right to rescue it and protect depositors. the bigger problem was that, having stepped in, the authorities were hamstrung by the inadequacy of the legal powers to resolve it quickly and cleanly. we have learned from that autumn ’ s experience. since then we have found imaginative ways to provide the market with the liquidity it needs ( through the special liquidity scheme, long term repos, and now the discount window ), we led the world in recapitalising banks in the autumn and we have resolved the banks which could not survive swiftly and effectively both through private sector solutions and through the use of statutory measures. i am delighted that tomorrow the first parts of the new banking act come into effect and give the bank of england new powers to resolve failing banks and protect depositors. at the heart of the act is the creation of a special resolution regime for uk banks and building societies. the fsa will have the power to trigger this regime before an institution becomes insolvent. and once a bank is in the regime, the bank will have the powers to arrange for it to be wound up, drawing on a new bank - specific insolvency - procedure, or to transfer the whole or part of the bank to a commercial purchaser, if necessary via a temporary bridge bank owned

future? in principle, non - financial corporate bonds issued in any euro area country, including greece, can be included in the pepp if they meet the relevant eligibility requirements, including the minimum rating threshold. for the time being, no greek corporate bonds qualify. but i hope that this will change in the future. over the past decade, prudential issues such as non - performing loans ( npls ) have been very challenging to deal with. npls have been one of the main structural problems in the greek banking sector, preventing investment and growth in the greek economy. as the euro area economy is heading towards a recession, which could prove long and deep, a new generation of npls could appear – and not only in greece. how is the ecb planning to deal with such a contingency? will the plans put in place to deal with the current challenge of npls be enough when the coronavirus crisis comes to an end? the crisis will certainly have negative effects on bank balance sheets. but this time, banks are not the cause of the crisis ; they rather have to be part of the solution. and they are in much better shape now, with more capital and a better liquidity position. the supervisory arm of the ecb has implemented significant measures to allow banks to continue to provide funding to firms and households. ecb banking supervision has communicated to banks that it will use maximum flexibility in evaluating the progress of ongoing plans to reduce past npls. it is important that we find the right balance between helping banks absorb the impact of the current downturn and identifying risks, deploy sustainable solutions for viable distressed debtors. only a strong, but at the same time sufficiently flexible, banking system is able to meet the financing needs of people and businesses. christine lagarde has mentioned that aside from what the ecb can and will do, the member states of the euro area should assume their responsibilities on the fiscal side. the esm is exploring various options towards that end, although differences among member states remain. would the ecb consider eurobonds in the form of “ coronabonds ” as a proper way forward in order for the euro area economy to counter 2 / 3 bis central bankers'speeches the economic impact of the virus? and could urgent circumstances lead to the activation of the “ omt bazooka ” being delinked from an eccl programme? these are political decisions, which are not within the ecb ’ s remit. that being said,