will need stronger democratic control over euro area affairs. to this end, we will need to consider a euro area format of the european parliament. relationships between euro area mps and national parliaments will also need to be enhanced. as i said, not only do we need to better coordinate public policies, but we also have to foster private risk - sharing throughout the eurozone. to recall wolfgang schauble, european leaders need to show “ that balanced budgets, growth and investment are not mutually exclusive, but rather go hand - in - hand ” 5. wolfgang schauble, “ managing europe – what is germany ’ s responsibility? ”, speech at the lse, march 3 2016. bis central bankers ’ speeches iii. building an efficient financing and investment union for tomorrow we need to improve investment financing in the eu. our efforts should be directed towards financing growth and innovation, and towards finding the right mix between debt and equity financing, while still preserving financial stability and consumer protection. in the eu, the european commission has launched the investment plan – so called juncker plan – and the capital markets union ( cmu ). until now, these initiatives have shown results, but they are not enough. a more ambitious approach would bring together the cmu, the banking union and the juncker plan. this is why i suggest to think of a financing and investment union. it is essential to clarify two objectives : ( i ) the diversification of financing for firms, and ( ii ) the strengthening of the euro area. as we argued in our joint article with jens weidmann in february, this financing and investment union – including more equity financing – seems to be the best way to match the abundance of savings and the lack of appropriate investment financing. first, let ’ s focus on the diversification of financing. the starting point should be firms ’ needs. new financing of business investment, which is one of the keys to innovation, must be enabled. there should be above all, more equity financing. • it is an essential fact that the equity share of corporate financing in europe is half as large as in the united states : 52 % of gdp in the ea, vs. 121 % in the us. • this is unfortunate because equity financing is the best way to share risks and opportunities, as well as to support innovation. “ catch - up ” growth, as in many emerging markets, can be financed by debt. but an economy standing at the technological frontier, as in the u

and in real terms. in order to have sustainably higher interest rates tomorrow, we must have them low today. that being said, not all unconventional instruments are legitimate. there are limits on how negative interest rates can go, as mario draghi stressed it. so this type of unconventional measure, although useful, should be used with care. and i think that socalled “ helicopter money ” would bring more harm than good : we do not need it and it is not on the table. the real issue is that monetary policy cannot do everything. we have done our bit but cannot create the lasting economic growth which underpins prosperity, including for savers. for this we need other policy makers to act. at a time when the euro area is experiencing both a negative output gap and a large external surplus – i. e. an excess of savings over investment, we must reflect on how abundant european savings could be put to the most productive use for investment in europe. abundant savings in the euro area current account balance ( % of gdp ) 10, 0 10, 0 7, 5 7, 5 5, 0 5, 0 2, 5 2, 5 0, 0 0, 0 - 2, 5 - 2, 5 - 5, 0 - 5, 0 - 7, 5 - 7, 5 - 10, 0 - 10, 0 spain source : eurostat, banque de france france italy germany euro area this is why we need to foster more extensive private risk - sharing in the eurozone, which requires a more integrated financing and investment framework. as the so - called fratzscher report on increasing investment in germany puts it : “ the key to a sustainable recovery in europe lies in faster growth that must be bolstered first and foremost through a joint investment and modernization campaign “. i will come to this issue. but we also need to achieve better coordination of public policies. to that effect, we need to think through the concrete role of a euro area finance minister could play. bis central bankers ’ speeches ii. why we need a “ full coordination ” institution in the euro area, embodied by a finance minister clearly, monetary policy cannot be a substitute for economic policy coordination or for the lack of reforms. if only for that reason central bankers need to take part in this debate, although taking action will obviously remain a decision for political leaders. this is why our focus should be on the eurozone economic governance and coordination. we know there is deep political resistance to sharing fiscal