to foster private investments totalling eur 630 billion in six years –, and the banking union. we need to put the pieces of the puzzle together in order to magnify their impact through synergies. there are two objectives : [ slide 7 ] increased diversification of firms ’ financing – with more equity financing –, and higher resilience of the euro area thanks to private risk - sharing across domestic borders. [ slide 8 ] the second step, after the fiu, would be a collective economic strategy for the euro area. growth and employment will be stronger in europe if we combine more reforms where they are needed, such as in france and italy, and more fiscal support in those countries with room for manoeuvre, such as germany. in practice, for such a collective economic strategy to exist, the euro area needs an institution that fosters confidence : it could consist of a euro area “ finance minister ”. the third step, in the longer term, would be a european fiscal capacity. it comes at the end as it requires more convergence and more confidence. a genuine euro budget would be a stabilisation tool and could include, for example, a euro area - wide unemployment insurance scheme. it could also be used to finance certain “ european public goods ” such as digital technology, the energy transition or the integration of refugees. and in the long term, it could directly issue common debt and even raise taxes. let me sum up. since the beginning of the crisis, europe has been able to strengthen itself and to build a set of instruments and mechanisms that have significantly increased its resilience ( banking union, the esm, the enhanced sgp, etc. ). it is now a matter of continuing this progress and not seeing brexit as a shock to the euro area but rather as an opportunity to pursue, in a structured way, the setting - up of a better economic union. and at the core of europe, france has made progress, which needs to be accelerated. but in an uncertain world, france appears as a rather stable country, seen from the resilience of its economy, the strength of its financial sector, as well as the solidity of its political institutions. 3 / 3 bis central bankers'speeches

with our comfort levels for a liquidity deficit. we do have a range of instruments to help us achieve this objective. currently, the banking system as a whole holds government securities to the tune of 29 per cent of ndtl, which is five per cent above the statutory requirement of 24 per cent. this reflects a relatively large capacity for liquidity infusions, about 2, 74, 000 crores, as and when the need arises. it is called the statutory liquidity ratio ( slr ) for a good reason. omos are our first preference for liquidity injection, since they are tactical in nature and do not require a change in any policy stance, real or perceived. further, although, omos are currently being used to make those infusions, the laf window is always available to the system to the extent of this surplus capacity. in addition, the recently established marginal standing facility ( msf ) allows banks to use a further one per cent of their slr holdings, which, given the interest rate structure, they will only do in situations of extreme stress. in recent weeks, there has been no recourse to this window, which could mean that the there isn ’ t too much stress in the system. in a sense, this window serves as an early warning indicator and we watch it very closely. beyond this set of instruments, there are others, like the slr itself and, ultimately, the crr. but, in thinking about these instruments, we must keep in mind that they straddle the divide between liquidity and monetary management, which, at the current juncture, we are intent on maintaining. to summarize the broad objective on this front, it is to ensure that domestic liquidity conditions do not de - stabilize financial markets or flows to the real sector, within the overall confines of the current monetary policy stance. importantly, we must realize that large fiscal deficits cannot be accommodated fully by omos. fiscal consolidation is a high priority. inadequate progress on this front will weaken monetary control and impact medium term inflation expectations. growth and inflation dynamics finally, let me say a few words on domestic growth and inflation dynamics, which take us from the immediate to somewhat further into the future. here, i am treading on familiar ground, since it is just about a month since our last quarterly policy review. of course, some things have changed since then, most notably, the extent of depreciation of the rupee since