the first category – to raise resilience – macroprudential action has especially contributed to strengthening bank capital positions. capital ratios of significant banking groups have already markedly increased from a median common equity tier 1 ( cet1 ) capital ratio of 7 % in 2008 to 12. 8 % at the end of 2014. this strengthening has been spurred by the preparations for the single supervisory mechanism and the conduct of the asset quality review last year. in addition, a number of macroprudential authorities in the euro area have activated three types of capital buffers : the buffer for global systemically important institutions ( g - siis ), the one for other systemically important institutions ( o - siis ) and the systemic risk buffer ( srb ). such buffers are intended to address the problems stemming from too - big - to - fail institutions, large, concentrated and interconnected banking sectors, as well as specific structural risks deriving for instance from exposures to areas affected by geopolitical tensions. bis central bankers ’ speeches as for the g - sii buffers, seven globally systemic banks from four euro area countries have been identified. 5 national authorities have overall also identified thirteen other systemically important banks building on the eba guidelines. 6 these are five for slovakia, four for the netherlands and four for finland. other countries will announce their global and other systemically important banks soon and capital buffers will gradually be phased in. in addition, estonia and the netherlands have already adopted systemic risk buffers to counter those risks emerging from groups of banks with similar business models. these three capital buffers address risks linked to the structural features of the banking system. they raise resilience and are applied in a static way. countercyclical capital buffers and dynamic loan provisioning, instead, can address cyclical features by increasing capital requirements when systemic risks build up. 7 until now, no ssm country has adopted positive countercyclical capital buffers given the prevailing subdued position in the credit cycle. but should stronger credit growth imply excessive risk - taking, the cyclical buffers are fully implementable in all ssm countries starting in 2016 to mitigate the upturn of a credit - driven financial cycle. in the second category, covering measures to address potential imbalances in the real estate sector, there have also been a number of initiatives. as mentioned, valuation metrics suggest that prices are generally still in line with fundamentals. estimates for the euro area as a

otmar issing : a framework for stability in europe speech by professor otmar issing, member of the executive board of the european central bank, at the university of london, european economics and financial centre, london, 19 november 2004. * 1. * * introduction the formation of economic and monetary union ( emu ) has created a framework for economic policy - making in europe which is unique in history. while the single monetary policy is oriented towards a union - wide objective, namely the maintenance of price stability, the other policy areas involving fiscal and wage policies - largely remain the competence of national governments and other national actors, such as the social partners. the combination of a centralised monetary policy and decentralised other policies has led to the evolution of a new set of rules and objectives for national and supranational policy - makers. the maastricht treaty and the secondary legislation, including the stability and growth pact, established the basic set of rules and objectives to lay out a framework for stability in europe. 2. responsibilities under the “ maastricht assignment ” with regard to monetary and fiscal policies, the assignment of responsibilities is defined by the maastricht treaty and the stability and growth pact, respectively. the treaty has assigned the maintenance of price stability as the primary objective to the single monetary policy conducted by the ecb for the euro area as a whole. without prejudice to its primary objective, the ecb shall support the general economic policies in the european community. for fiscal policies, which continue to be largely a national responsibility, the treaty sets out a framework of surveillance and disciplining mechanisms in order to maintain sound public finances. these indispensable cornerstones of the institutional framework agreed in maastricht have been confirmed by the constitution recently signed by the heads of state and government in rome. the stability and growth pact, which was agreed by all governments in 1997 after the signing of the maastricht treaty but before the launch of the single currency, sought to provide additional incentives for maintaining fiscal discipline at the national level by operationalising the excessive deficit procedure of the treaty. it also specifies a commitment to achieving medium - term budgetary positions “ close to balance or in surplus ” and incorporates multilateral surveillance procedures and the exchange of information in conjunction with medium - term stability programmes submitted by national governments. assigning the overriding objective of price stability to the single monetary policy is an example of the benefits of a clear division of responsibilities between different policy