coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. in order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. regarding fiscal policies, the governing council reiterates the need for rebuilding fiscal buffers. this is particularly important in countries where government debt is high and for which full adherence to the stability and growth pact is critical for safeguarding sound fiscal positions. likewise, the transparent and consistent implementation of the eu ’ s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. improving the functioning of economic and monetary union remains a priority. the governing council welcomes the ongoing work and urges further specific and decisive steps to complete the banking union and the capital markets union. we are now at your disposal for questions. 2 / 2 bis central bankers'speeches

and garricano ( 2009 ), the spanish cajas whose chief executives were appointed on the basis of political standing, rather than banking experience, extended more loans to real estate developers and fared substantially worse both before and during the crisis. see cunat, v. and and garicano, l. ( 2009 ), “ did good cajas extend bad loans? the role of governance and human capital in cajas ’ portfolio decisions ”, october. giannetti, m., and ongena, s. ( 2009 ), “ financial integration and firm performance : evidence from foreign bank entry in emerging markets. ” review of finance 13, 181 – 223. an example of this view is veron, n. ( 2013 ), “ banking nationalism and the european crisis ”, october. van beers, m., bijlsma, m. and zwart, g. ( 2014 ), “ cross - country insurance mechanisms in currency unions : an empirical assessment ”, bruegel working paper 2014 / 04, march. sørensen, b. and yosha, o. ( 1996 ), “ channels of interstate risk sharing : united states ( 1963 – 1990 ) ”, the quarterly journal of economics, november. bis central bankers ’ speeches of two cross - border risk - sharing channels : private ownership of financial and non - financial firms and private insurance against banking crises. first, private ownership structures in the euro area do not offer much possibility for risk sharing. for one, european firms tend to have a preference for debt financing over equity, 9 which has so far been less suitable for absorbing losses – that is, until the adoption of the new bail - in rules for banks. and there is a pronounced home bias in the holding of that equity, meaning losses are not shared across borders. only 44 % of equity issued in the euro area is held by other euro area residents. thus, equity market integration falls well short of what we might expect in a single market in capital. the low level of cross - border ownership of retail banks also matters for risk - sharing. this has an equity aspect : whereas cross - border banks, in particular those that operate via branches, can in principle offset losses in one jurisdiction with gains made in other jurisdictions, national banks are exposed to concentrated risks. and it has a funding aspect : cross - border banks are less likely to be exposed to “ sudden stops ” as intragroup funding acts as a shockabsorber.