the euro area can be thought of like the gearbox of a car. the cogs do not all need to be of equal size but they all need to be moving in the same direction. if only one cog starts going the wrong way, the whole car grinds to a halt. nonrespect of agreed rules by some is clearly establishing moral hazard risks for the actions of others. many things in the euro area need to come together to create an environment in which businesses and entrepreneurs can generate added value. ernest solvay, after whom the library in which the workshop will take place tomorrow is named, provides us with a good bis central bankers ’ speeches example. in the early 1860s, he had a brilliant idea for the industrial production of sodium carbonate. but it took the perseverance of several financiers and ten years before the process was ready to be used on an industrial scale. and solvay relied on a patent to protect the intellectual property that ultimately formed the basis of his corporate success. over 150 years later, a capital markets union can help the ernest solvays of today. it can enable all europe ’ s entrepreneurs to obtain the financing they need to turn their innovative ideas into successful businesses that will create jobs and promote sustained prosperity. thank you for your attention. bis central bankers ’ speeches

spell out more clearly what we want and what we do not need, what we can achieve and what we should not attempt. this way we can prevent the capital markets union from becoming a ‘ jack of all trades, master of none ’. in my view, the various motivations for a capital markets union can be summarised under two main objectives : on the one hand, we need to find ways to generate growth. in a way, the euro area economy is like a plane flying on only one engine : bank financing. to increase the speed and stability of the plane, it would be good to add a second engine : capital market financing. hence, we must seek to deepen capital markets so that they can play a more important role in supporting the real economy. and we must name areas where removing frictions between national markets can bring new business. on the other hand, we need to ensure financial stability in the longer term. an impressive amount of regulation has been introduced since the crisis began, tackling several fundamental problems in our regulatory set - up. indeed, the crisis showed that our initial rules were in some areas too lax and too heterogeneous across countries to ensure the stability and singleness of europe ’ s financial market. at the same time, we should avoid excesses : more regulation does not always mean more stability. in many instances, the two objectives of growth and financial stability complement each other. i believe that greater integration of markets can be key to both. fifteen years after the financial services action plan, it is time for another big step forward for europe ’ s single financial market. how to implement a capital markets union? so what measures do we need to take to achieve these objectives? to my mind, a comprehensive capital markets union requires thinking along three dimensions. the first is the opening of the market itself : in this regard, we have already achieved a great deal within the eu. the second is the introduction of common regulatory standards. and the third consists of the institutional structures that enforce these regulatory standards. i will elaborate on the second dimension and also make some remarks on the third dimension. bis central bankers ’ speeches regulatory dimension let me first address the regulatory dimension. financial markets are complex systems with many different players, products, infrastructures and currencies. as a consequence, financial markets are at the intersection of many different fields of legal rules, including contract law, corporate governance, capital requirements, insolvency, taxation and consumer protection. to ensure