. to be sure, the concept of a capital markets union is not as clear - cut as that of a banking union. capital markets are complex and non - bank finance takes many forms : corporate bonds, private equity, public equity, venture capital or peer - to - peer lending, to name just a few. and integration not just relates to financial products but also to integral elements of the respective markets, such as stock exchanges and central counterparties. thus, any attempt to form a capital markets union would require a lot of different measures in a lot of different areas. nevertheless, the idea of a capital markets union has gained some traction lately. among others, the president of the european commission, jean - claude juncker, and yves mersch, member of the executive board of the ecb, have promoted the concept of a capital markets union. to me, it would be a logical step to supplement the banking union with a capital markets union. it would reduce fragmentation in european financial markets and, at the same time, enhance their efficiency and stability. thus, it is certainly a goal worth pursuing. 5. conclusion ladies and gentlemen george washington is credited with having written, more than two centuries ago in a letter to a friend, that a united states of europe would come into being. this is certainly a bold vision which has been voiced repeatedly since the days of george washington – by winston churchill and, more recently, the former vice - president of the european commission, viviane reding. the vision of a united states of europe is a very broad approach aiming at an encompassing political integration. in my speech today, i have taken a more modest approach and argued from an economic point of view. i have highlighted three areas where deeper integration might help to enhance the stability of monetary union. the first area is public finances, although a fiscal union is currently a rather unrealistic vision. the second area is the banking system, and here we are on the eve of a major step towards bis central bankers ’ speeches integration – in november of this year, the banking union will become reality. the third area is capital markets. looking to the future, i consider a capital markets union another project that would contribute to enhancing the stability of monetary union. in my view, integration is the way forward as long as it is balanced. not all proposals for deeper integration that are currently being discussed fulfil this criterion. take the example of eurobonds : in essence, eurobonds would provide a joint

liquidity is critically important to us from a prudential perspective in ensuring the strength and stability of our deposit takers. system liquidity is ultimately our responsibility as a central bank. given its importance for monetary policy transmission and financial stability, we are not complacent about the need to monitor and manage system liquidity closely. market liquidity, while not an explicit responsibility of the reserve bank, is something we take an interest in for its impact on policy transmission and ultimately its importance in helping to grow the vibrant capital markets needed to support new zealand ’ s economy. unclassified unclassified the ancient mariner felt he was cursed for having killed an albatross that his fellow sailors believed was the bird “ that made the breeze to blow ” and his punishment was to wear the deceased bird around his neck. we want to see wind in the sails of our capital markets and we certainly don ’ t want an albatross around our neck. as market participants we all have an interest in ensuring that we have well - functioning and liquid markets, and not the mariner ’ s “ painted ocean ”. as prudential regulator, the rbnz also needs to ensure that deposit taking vessels are seaworthy. thank you. unclassified unclassified references silk, k ( 2022 ) ‘ new zealand ’ s monetary policy implementation framework ’, speech at kanganews new zealand debt capital market summit, auckland, new zealand, https : / / www. rbnz. govt. nz / hub / publications / speech / 2022 / speech2022 - 09 - 07 callaghan, m, haworth, c, and poskitt, k ( 2023 ) ‘ how the reserve bank implements monetary policy ’, reserve bank of new zealand bulletin 86 ( 3 ). reserve bank of new zealand ( 2022 ) ‘ prudential policy department document bs13 : liquidity policy ’, https : / / www. rbnz. govt. nz / - / media / project / sites / rbnz / files / regulation - andsupervision / banks / banking - supervision - handbook / bs13 - liquidity - policy. pdf. reserve bank of new zealand ( 2023 ) ‘ liquidity policy review consultation paper # 2 ( significant policy issues ) ’, https : / / www. rbnz. govt. nz / have - your - say / 2022 / review - of - liquidity - policy. reserve bank of new zealand ( 2022 )