adjustments. there can indeed be technical considerations, such as the impact of the forthcoming liquidity regulation under the basel iii agreement, which should be calibrated in such a way that it does not impede the functioning of the interbank market. but it ’ s trust that is the essence of the lending relationship. restoring trust in banks and disentangling the fate of banks from that of governments are absolute prerequisites. the ecb ’ s two longer - term refinancing operations, or ltros, have been powerful enough to ensure continued excess liquidity and to ease most of the tensions in funding markets. but there is nothing that the ecb can do when it comes to banks ’ solvency. euro area banks should strengthen their capital and do it in a way that makes them less dependent on their governments. to this end, the euro area needs a single resolution mechanism and resolution fund, and a unified mechanism of deposit insurance. banks that need recapitalisation must also be allowed to directly access the european financial stability facility ( efsf ) and, when it is in place, the european stability mechanism ( esm ). let me add a warning. letting euro area banks access the efsf / esm should not be a way for governments to escape their bis central bankers ’ speeches responsibilities and to rid themselves of the cost of past errors. it should be accompanied by strong, centralised supervision of systemically important institutions. in a nutshell, the only way out of this crisis is to map out a credible path towards a stronger europe. of course, far - reaching institutional changes can only be based on democratic deliberation, especially as some of those changes would entail an additional transfer of responsibilities to a supranational level. any such mechanism should have strong democratic foundations and be subject to appropriate accountability, in particular to the european parliament. how then can growth be achieved? price stability and financial stability are essential preconditions for growth. what can then be done to improve the long - term rate of growth of the euro area? many good ideas have been floated here and i will not repeat them. a lot can be achieved in my view by strengthening the single market for goods and services. so far, the single market has not suffered from the ongoing crisis, but we all know that it has not been completed, especially in services. mario monti made some proposals in this respect in 2010, as did michel barnier more

– in the case of small and medium - sized institutions, the national supervisors ; in the case of large banks, the ecb. so there is much to be said for harmonising supervisory expectations here too and for granting the privileges according to uniform criteria – both across countries and across institutions. i ’ d like to be clear about one thing, however : the aim is not to call into question the protection schemes in general. the objective is to harmonise the supervisory treatment of the systems. ultimately, european banking supervision can only apply the principle of equal treatment as far as national banking regulation permits. as for national banking regulation, there are still a number of differences, some of them major, among the countries of the euro area. let ’ s compare it with football for a moment. for the referee it would be difficult if he were in charge of a game in which each player played by different rules and in which there were some parts of the pitch, scattered around, where the rules were different. but this is exactly the situation european banking supervision is contending with at the moment. one source of the regulatory differences is the crd iv directive which, as a european directive, has to be transposed into national law in the individual countries. and it wasn ’ t and won ’ t be as uniformly implemented as would be sensible for single supervision. let me mention just one example to give you an idea of these differences, which are often hard to understand. the supervisor assesses whether candidates for the governing bodies of banks are professionally competent and reliable. however, the corresponding rules are implemented in very different ways at national level. in some countries, for instance, it ’ s not only the candidates for the governing bodies who are evaluated but also those for key positions at the levels below. some countries use questionnaires for the assessment and a range of detailed evaluation criteria, others don ’ t. some countries interview the candidates, in part with the support of psychologists, others don ’ t. some countries don ’ t allow candidates to occupy their new post until the supervisory body has given its approval. in other countries candidates can take up their new post even if the documents required for the assessment are not yet available. these differences create serious complications for european banking supervision and are an obstacle on the way to a single financial market. how can it be that the executive board members of a globally active bank in one particular country have to have different skills, knowledge and experience from their counterparts in another country? here too