central bankers'speeches let me conclude. one should not underestimate how much has been achieved in such a short period of time. nevertheless, the foundations of the european architecture are still not sufficiently robust to withstand the impact of a future crisis. this should be the focus of policymakers and relevant institutions. decisive political will to move forward with the completion of the banking union is therefore required, accompanied by a proper evaluation of the underlying implications for banks ’ business models. if the necessary political will is insufficient, then, ladies and gentlemen, allow me to say this openly : instead of putting ‘ band - aids ’ in the framework to compensate for the lack of crucial instruments, let ’ s collectively recognize that it is urgent, and in the best interest of european citizens, that we revisit the existing rules now. if it turns out that it is not possible to complete the banking union, we must structurally revisit the project. otherwise, we risk both fragmenting the single market and realising we missed this opportunity when the next crisis hits. in that case, we cannot expect european citizens ’ forgiveness. thank you for your attention. 1 as prepared for delivery. 2 communication from the commission to the european parliament and the council – a roadmap towards a banking union, com / 2012 / 0510 final. 3 nouy, d. ( 2017 ), “ banking union, three years on – has it lived up to its promises? ”, statement at the single resolution board conference, brussels : “ banks are supervised and resolved at european level, but in the event of a failure, the negative consequences are felt mainly at national level. ( … ) if, for instance, the spanish banco popular had actually failed, portugal ’ s deposit insurance scheme would have had to refund depositors in the portuguese subsidiary. that is a consequence of having supervision and resolution at european level. the portuguese authorities would not have been involved in either process. ” 4 eba, esma ( 2018 ), “ statement of the eba and esma on the treatment of retail holdings of debt financial instruments subject to the bank recovery and resolution directive ”, eba / op / 2018 / 03, available at : www. eba. europa. eu / documents / 10180 / 2137845 / eba + esma + statement + on + retail + holdings + of + bailinable + debt + % 28eba - op - 2018 – 03 % 29. pdf 5 restoy,

especially when monetary and fiscal policy have limited room for manoeuvre. as often in the past in the case of the european project, now, in the current context, bold decisions are more needed than ever. the completion of banking union is in many aspects a way to restore european citizens ’ confidence in the european institutions, build the necessary trust between member states and address the rise of euroscepticism. this starts by putting aside the risk reduction vs. risk sharing debate that is preventing the establishment of a fully - fledged edis. edis is a necessary risk reduction instrument that reduces moral hazard7 – and should be recognized as such. recent research by the ecb has shown that with proper risk - based banks ’ contributions, an almost negligible cross - border subsidisation occurs. 8 the fear that edis could imply significant transfers across countries in case of a new banking crisis is therefore unjustified. but establishing edis in isolation is not enough. recent experiences put the topic of harmonising eu banks ’ liquidation regimes on the agenda of policymakers. but what does bank liquidation mean? and do we have the tools to ensure its orderliness in the current context? before jumping into the harmonisation of liquidation regimes, it must be acknowledged that this is not a silver bullet. indeed, the considerable social and economic impact ensuing from the failure of a bank with systemic relevance at local level would remain. recent calls to form a sort of european fdic ( a version of the american federal deposit insurance corporation ), merging the single resolution fund ( srf ) and edis into one single entity, 9 are welcome in this regard, provided that the legal framework is fixed and that financial stability – both at european level as well as at national level – is enshrined as the first and fundamental objective of any intervention. in fact, the establishment of banking union was inspired by the american fdic. however, it fell short of providing the srf or edis with right instruments and means to guarantee financial stability. for this to happen, a clear definition of what constitutes public interest and critical functions is required. in view of recent cases, it has been argued that public interest is likely to be a variable of time and geography, “ one at the eu level and another one by national authorities ”. 10 this discussion cannot be taken only at technical level as its consequences are at the core of banking union ’ s credibility. european citizens expect this from us. 3 / 4 bis