##iberations, to be released in the next weeks, and i will have the honor to give a lecture on this topic at the university of cambridge tomorrow. now, let me turn to the last topic of my speech today, which is also another project my staff is currently looking at in more detail and where a lot of optimism is required : 3. fostering the capital markets union in the eu 3 / 5 bis - central bankers'speeches as we have seen, the growth outlook in europe is not especially bright. even more, looking at productivity developments, we are seeing that europe is increasingly lagging behind, for instance when compared to the us. also, taking a longer run view : long - run productivity growth and innovation – as e. g. measured by patents or expenditure on r & d – are lagging behind on the continent as compared to the us but also – even if not as starkly – in contrast to the uk. a major reason for this might be the fact that the development of the capital market is substantially lagging behind in europe : market capitalization is significantly lower in the eu than in the us and the uk, and fragmentation is excessive. in fact, market capitalization in europe is so fragmented that it already is burdensome just to quantify it at an aggregate level. further, the market for corporate bonds is only a fraction of that in anglo - saxon economies, and firms in many europeaeconomies are excessively dependent on banks. the low market capitalization in the eu also hinges on a limited pool of private capital, such as large - scale investment and pension funds that might be interested in investing in risk capital markets. even more problematic for the growth potential of the european economy is the lack of venture capital. currently, even in the best - performing european economies, venture capital as a share of gdp only corresponds to half of the level available in the us, and as an aggregate, the euro area vastly underperforms compared to the us and also the uk in this regard. as an example, the uk has developed a very successful model for growth capital – the bgf – which is supporting innovative growth companies with patient capital. we know from empirical evidence that deep capital markets are conducive to growth in countries with sound democratic institutions like the eu. this calls for more action to deepen capital markets. importantly, it should be noted that deep capital markets can also help in the provision of the urgently needed capital to finance the green and

is well placed to tackle the emergence of national interests in supervision. it is therefore imperative that the structures and the processes of the ssm support a european perspective and interests. so, how does the ssm measure up in this respect? joint supervisory teams, led by the ecb, have been established for carrying out the day - to - day supervision of significant banks. they integrate the ecb and national authority staff into single supervisory units. it is fair to say that full harmonisation in the supervisory approach has not yet been reached, but significant progress can already be observed. going forward, the work on establishing clear principles and criteria to guide ssm supervisory decisions needs to be further prioritised. as regards the elimination of national biases in supervision, in my view, the functioning of the ssm so far points very clearly to this direction. in fact, in the current global banking environment, it may be better to aim for a level playing field internationally and enhance competition in the national market than look after the interests of domestic banks. frankly speaking, the elimination of the old habit of defending one ’ s “ national champions ” may turn out to be more challenging in the crisis resolution pillar of the banking union than in bank supervision. third, the preconditions for the ecb to be a world - class supervisor are in place. the ssm aims at adopting best supervisory practices to conduct high - quality supervision with no biases. the ssm, as a system, has the necessary skills and resources to live up to the high expectations placed upon it. it is a strong, independent and multicultural supervisor with the ability to attract highly skilled staff. the participating national authorities get all the information and take part in all supervisory decisions. particularly the smaller national supervisors benefit from the ssm, since on their own they would not be able to participate in all relevant work in an increasingly complex world. through the ssm, they stay up - to - date and can take part in regulatory developments at the global fora. i am convinced that the ssm will soon establish itself among the leading global banking regulators with high demand for its best practices. obviously, as with any new institution, getting up to full speed will take some time. among other things, the increased demand for skilled supervisors needs to be matched at the ssm area, and there are a number of practical issues related to day - to - day supervisory work, including language issues, yet to be fully ironed out. bis central