##ity pressures on countries with no fundamental balance of payments difficulties ; a new sdr allocation, the biggest ever, for the equivalent of 250 bn usd, which has been enacted by the imf executive board. these are, however, revocable and limited sources of liquidity provision. swap agreements can be ( and have been ) terminated. out of the total, only a small part of the sdr allocation will benefit countries which may effectively need to use them. more may be needed to substitute for national foreign exchange reserves as a permanent insurance mechanism. contingent liquidity the search for new liquidity sources meets with an inescapable moral hazard problem. on the one hand, to be equivalent to reserves going forward, multilateral liquidity must be available ex ante and without condition. on the other, there is a danger that fully unconditional liquidity be used to deal with fundamental “ solvency ” imbalances. in real life, this is not an easy distinction to make. the dilemma is solved, at the domestic level, by the provision of eligible collateral. this may prove very uneasy for international liquidity : transferring ownership of substantial amounts of sovereign assets between countries or to international institutions would meet with huge legal and political difficulties. this is the rationale for conditionality. but, of course, conditionality creates an uncertainty which is incompatible with the purpose of instant supply of liquidity. a conditional facility will never be a perfect substitute for reserves. many countries fully eligible to the flexible credit line ( fcl ) have used foreign swaps instead. anecdotal evidence suggests that swaps are often perceived as carrying less of a stigma effect. one way to deal with moral hazard would be to distinguish explicitly between two different risks facing each country : on the one hand idiosyncratic risk, created by national policies and country specific shocks ; on the other hand, “ systemic ” risk stemming from aggregate liquidity shocks occurring on a broader – global or regional – scale. countries would self insure against idiosyncratic risk by holding a sufficient amount of reserves. protection against systemic risk would come from a multilateral mechanism for international liquidity provision. of course, the distinction between idiosyncratic and systemic risk may be difficult and involves a broad degree of judgment. but two basic rules should be guiding future work on a multilateral safety net : ( 1 ) conditions for access should be specified ex ante ; and ( 2 ) those conditions should be fully delinked

investment in europe. the action plan on the “ capital markets union project ”, launched in september 2015, aims at diversifying the way the european union economy is financed. the objective is to achieve a better balance between bank credit and market - based financing. france is a euro area frontrunner in this field, with markets providing 40 % of the financing for its economy. various initiatives are already well underway, like the framework for simple, transparent and comparable securitisation instruments, or the revision of capital requirements for investment in infrastructure by insurance companies. the juncker plan and the capital markets union should complement each other and the banking union, which is already in place, to fully deliver their results in terms of growth and investment. therefore, i prefer the concept of a “ financing and investment union ” rather than a “ capital markets union ”, as it better reflects the ultimate objective which is growth, thanks to a better mix of financing instruments including, but not limited to, capital markets [ slide 8 ]. significant amounts of savings are available in the euro area and these should be directed towards long - term assets, as well as to those projects and countries that need them. innovative schemes need to be developed at european level, such as european venture capital funds, in order to support the creation and growth of new businesses. the composition of investments is equally important, as too little money is devoted to r & d and long - term investments. we also need to encourage equity financing rather than debt funding. 5 / improve european economic governance the second idea i would like to share with you relates to economic governance in europe. i believe we need to make progress towards a more economically integrated euro area. this is essential, regardless of whether or not the united kingdom remains in the european union. naturally, i would like it to stay in. my point is not purely institutional. it is not about “ more brussels ”, it is about more growth and employment. indeed, economists estimate that the current lack of coordination between national economic policies has cost europeans between two and five percentage points of gdp growth since 2011. contrary to the case of monetary policy, the aim is not to fully integrate all of our economic policies at the european level, but to achieve a “ full coordination ” of fiscal and structural policies. for this, we need to have shared economic goals, and a true “ collective strategy ” for the euro area, in which each country has a role to play to improve everyone ’ s situation. this requires trust