of strong banking supervision, the gains will be mutual. but let ’ s be honest. as any economist will tell you, there ’ s no such thing as a free lunch. surely all this must come at a price? well, in my view, the price of being a part of the banking union is low compared with the benefits it offers. is it a free lunch? if you are part of the banking union, you need to share. you need to share control over banking supervision and resolution. that is the price to be paid. now, i understand that it is often seen as vital to have total control over sensitive policy areas. and i understand that there is a feeling that if 4 / 7 bis central bankers'speeches you want something done well, you must do it yourself. but is that really true? i don ’ t think so. if we work together, we are still in control and we can still do things well. the history of the eu is a case in point. when european countries signed the treaty of rome 61 years ago, they chose to work together instead of working alone. today more than ever, this choice is also a reaction to a changing world. some of the current changes are beyond any single government ’ s control, and are better managed with the help of strong allies and good friends. the world of banking is no exception. our financial systems have grown closer together and have become much more complex than they used to be. large banking groups now cover many member states. we have all benefited from this. but if we want this trend towards integration to continue, we must make sure it does not come at the cost of greater instability and more crises. we need rules that apply across borders just as banks operate across borders. and we need supervisors who have the power to see and act across borders. in short : we need to cooperate. and when i say cooperate, that ’ s what i mean. i know that some may think we have created a system in which the ecb and the single resolution board hold all the power. i think otherwise. the banking union is very much a joint project. just look at banking supervision. we at the ecb cannot act alone. instead, we work closely together with the national supervisors. we also rely on their national expertise, and we rely on their experience. after all, they know a lot about the local circumstances, such as specific covered bond frameworks. without them, european banking supervision would not work.

it runs counter to the idea of a single market and fosters regulatory arbitrage ; and it violates the principle of same business, same risks, same rules. every day we supervisors struggle to maintain the equal treatment of banks that have to comply with different rules even though these differences are not justified by national specificities with regard to risks. that said, where we do have scope to act, we have made use of it. we have, for instance, agreed to exercise options and discretions contained in european law in a harmonised manner. this was a huge step, but more could be done. that, however, is up to the legislators. and there are indeed a few areas where further harmonisation would help the single market to progress : the fit and proper assessments of banks ’ board members, the liquidation of banks, large exposures and the supervision of branches of non - eu banks. now, don ’ t get me wrong : what has been achieved so far is truly remarkable. no large reform project has ever been perfect from the start, so it is only natural that more remains to be done. and it is worth putting our achievements into perspective. a lot has been done in a short time. the banking union is a project that is unprecedented in scope and scale. just look at its first pillar, european banking supervision. it involves 26 authorities from 19 countries plus the ecb. this sometimes prompts questions about how efficient it can really be. did we, in the end, just build a huge and overly complex bureaucratic machine? well, i ’ m not giving away any secrets if i tell you that it is kind of complex. and to countries that are thinking about joining the banking union through close cooperation agreements, it might look even more complicated. 3 / 7 bis central bankers'speeches in order to take a decision, we have to follow a finely balanced procedure. one of the reasons is that two bodies are involved which have to interact in a careful manner. the first one is the ecb ’ s supervisory board, which brings together the ecb and all the national supervisors. the second body is the ecb ’ s governing council ; it brings together all the national central banks and acts as the ultimate decision - making body. while both bodies play a role when it comes to taking decisions, they are, at the same time, subject to what is known as the separation principle. this principle was put in place to deal with potential conflicts of interest between monetary policy