##lect attention from proper reflection on the more important issues. i am sure that we shall be able to flexibly adapt the framework as needs arise. 4. the capital markets union that european firms rely too heavily on banks for external funds has been known for decades, but the crisis has now thrown the dangers of this model into sharp relief, highlighting the need to enhance the role of market funding. the capital markets union ( cmu ) initiative is directed to this ambitious goal. further development of non - bank sources of funding seems possible, if we compare the european to the more market - oriented economies. european businesses get the bulk of their financing from banks, while in the us market - based financing is much more highly developed, even for smes. the commission has set an ambitious agenda in this field, with the aim of channeling funds to europe ’ s businesses, particularly smes. the agenda includes an effort to revitalize the market for sound ( simple ) securitizations ( which requires work at eu level to design a consistent framework and avoid regulatory arbitrage ) ; harmonization of the market for covered bonds, building on the successful experiences of some european countries in order to generalize best practices ; stimulation of crowd - funding initiatives, gradually eliminating bis central bankers ’ speeches significant national differences in legislation and supervisory approaches ; enhancement of the small - scale corporate bond markets via mini - bonds ; and endorsement of the efforts to identify a common framework for private placement transactions. 2 the commission is also working to improve and standardize information on firms, in particular smes, and the related disclosure and transparency requirements. the scarcity of such comparable information is a deterrent to cross - border financing, which cuts across the different market segments and types of instruments. in the medium to long term, the cmu can bring significant benefits : broadening and diversifying the eu financial market, thus improving its resilience, efficiency and competitiveness ; eliciting greater long - term financing ; and enhancing the supply of equity, to encourage euro - area firms to rely less on bank credit and to rebalance their capital structure. in the short term, the efforts to enhance market - based sources of funding are part of the policy response to pronounced bank deleveraging within the eu and the attendant anemic credit growth. some of the items on the commission ’ s agenda may be crucial to this end. indeed, bank deleveraging itself, together with the search for higher yields by institutional

discussions and official publications. if unification is to advance, we must reinforce mutual trust at the international level. this must be achieved over time, through consistent behavior on the part of all parties and recognizing that it is in the interest of every member state to factor in the need to reduce negative spillovers from one economy to the others. if we succeed, it will gradually become clear that there is no conflict between european financial integration and financial stability ; indeed, that by favoring the cross - border diversification of risks, financial integration will foster financial stability. let me now turn to some specific issues. micro - versus macroprudential policies. throughout 2014 and since the launch of the ssm, the european supervisory authorities have focused mainly on the capital position of banks. this emphasis on strong capitalization was necessary to restore confidence. now that the comprehensive assessment has shown that the european banking system is solid, it is essential to avoid inducing pro - cyclical behavior by banks, curtailing lending to the economy. let me elaborate on this issue. any bank, taken individually, may have an incentive to strengthen its capital adequacy by curtailing lending. this does not have strong counterindications if other banks have incentives to expand lending. but if all the banks seek to deleverage at the same time, this could trigger a credit crunch, with adverse repercussions on the economy and ultimately on the banking system itself. the crisis drove this simple lesson in externalities home emphatically, prompting the creation of macroprudential authorities in most countries. 1 and as we know, the incentives of micro - and macroprudential authorities are aligned during economic expansions ( both policies should be tightened, to strengthen the resilience of single banks and to “ lean against the wind ” of an aggregate credit boom ). however, they tend to diverge during downturns, when, as i just now observed, the macroprudential authority should be wary of imposing stiffer capital requirements. see the de larosiere report, 2009. bis central bankers ’ speeches the present state of the economy in the eurozone offers a textbook case of the potential tension between micro - and macroprudential policies. there is broad agreement ( eg within the esrb ) that macro risks – low nominal growth in particular – are among the more serious threats to financial stability. in the eurozone credit growth is negative, and the credit / gdp gap ( the main indicator set