– 2017 ”. 15 fell, j., m. grodzicki, r. martin and e. o ’ brien ( 2016 ), “ addressing market failures in the resolution of non - performing loans in the euro area ”, special feature b in ecb financial stability review, november 2016. 16 see fell, j., c. moldovan and e. o ’ brien ( 2017 ), “ resolving non - performing loans : a role for securitisation and other financial structures? ”, special feature c in ecb financial stability review, may 2017. 17 constancio, v. ( 2016 ), “ challenges for the european banking industry ”, speech at the conference on “ european banking industry : what ’ s next? ”, organised by the university of navarra, madrid, 7 july 2016. 7 / 7 bis central bankers'speeches

of recapitalising banks through the esm in the case of countries not subject to a programme, we could speak of the first significant steps towards a euro area regime. in the medium term, in my opinion, this should be followed by the creation of a pan - european resolution fund and a pan - european resolution authority. this design would maximise the benefits of the financial union, since only a pan - european orientation would minimise the involvement of taxpayers, help diversify risks, and effectively break the pernicious link between risks to the national banking sector and to the respective sovereign. awareness about these advantages should help ease technical and political resistance to these initiatives. 4. 4 monetary policy i must mention, finally, the fourth pillar : monetary policy. it has been said repeatedly, perhaps with exaggeration, that when the history of the crisis which started five years ago is written, the ecb and the eurosystem will emerge as the saviours of the euro. however, it will be no exaggeration to point to the ecb as the first line of defence, as early as august 2007, and possible the most prominent one once the margins for fiscal policy and financial sector guarantees had been squeezed in the face of market pressures. as the only european institution with executive powers and a federal mandate and functioning, the temptation is to conclude that there is nothing new to invent in this domain. “ if it ain ’ t broke, don ’ t fix it ”. i think this is a feeling that many share. be it as it may, what is important is to realise that, after just over a decade, the ecb has become a model of credibility at the international level. first, because it has fulfilled its mandate of price stability in a period marked by crisis and episodes of sharp rises in the prices of raw materials and energy. second, because through the use of its unconventional measures – deployed more quickly and with more flexibility than any other central bank – the ecb has, to a considerable extent, been able to repair the transmission mechanism of monetary policy and to provide enhanced credit support without which a credit crunch would have taken place in the euro area. and third, because its contribution to financial stability in the euro area has increasingly become clear, without prejudice to the ecb ’ s primary mandate of price stability. the ecb ’ s contribution to financial stability has been both an indirect consequence of its monetary policy, as both price stability and non - standard measures have