of our journey. much more needs to be done regarding either the role of the ecb or esma ’ s prerogatives over eu ccps. 2 / 3 bis central bankers'speeches both the banking union and the capital markets union are the key components of what we call with jens weidmann a genuine “ financing union for investment and innovation ” : this idea is a way of better channeling our abundant resources – our eur 340 billion savings surplus in 2018 – towards the concrete needs of the european economy : the energy transition, smes ’ equity or digital innovation. this unified branding has the merit of highlighting the purposes of this union to the general public : investment and innovation, or in other words the financing of the future. iii. some pillars of a european financial sovereignty in the longer run, we should build three key pillars of the future european financial sovereignty. first of all, the eu needs to strengthen its position as rule maker through enhanced equivalence regimes. brexit has given new momentum to this topic : a comprehensive reassessment of current equivalence regimes is essential given the scope of the relationships between the eu and the uk. beyond the issue of brexit, the review of equivalence regimes also provides an opportunity to improve them. there is a need for greater transparency in the procedure for granting equivalences, within a comprehensive institutional framework. the monitoring and control of equivalence decisions could also be improved by granting more power to esas, and by providing the european commission with more gradual options through flexible tools in the case of regulatory divergence : for example, temporary, partial or conditional lifting of equivalences. the second pillar of european financial sovereignty concerns the efficiency of retail payments and market infrastructure. regarding retail payments, while the single euro payments area ( sepa ) has proved to be successful, further convergence is still needed in response to the growing influence of major third countries ’ firms in payments solutions. in order to preserve our sovereignty, a european strategy for retail payments would be necessary, with a view to ( i ) addressing market fragmentation and promoting unified european - based solutions, ( ii ) improving the protection of payment data and ( iii ) encouraging european players to take part in the current concentration in retail payments. regarding infrastructure, the european system of central banks shouldered its responsibilities in strengthening european post - trade integration, notably through the target2securities platform. in the coming years, the set - up of a unified collateral management platform operated by the eurosystem will be

that the majority of non - performing loans are held by banks that are healthy overall ; because they do not need an immediate sale of bad loans, they can take advantage of generally higher recovery rates than current market prices imply. moreover, incentives to reduce the ratio of npls to outstanding loans, which could have been done quickly had it been possible to set up, with public backing, a company to manage such assets, are now provided by the measures introduced by the italian authorities over the last two years. these are designed to foster the development of a market for npls, in part by shortening the recovery process. in the near future, a large volume of bad loans could be sold or securitized, including through recourse to government guarantees for senior tranches. the timeline for this recovery process should not be cut too short, however. the risks that could arise along the way will be smaller, the more efficient are economic policies in supporting the recovery. * * * the action taken to reduce the npl ratio is essential, but by itself it cannot conquer the challenges facing italian banks. all of them, not just the ones most weakened by the crisis, must improve their profitability, adapting their business models to a market environment that has been profoundly altered by technological advances and regulatory reforms. by drastically cutting costs without delay and significantly raising efficiency it will be possible to free up considerable funds to invest in technology and in improving the quality of human capital. on occasion, sweeping measures may be taken to reduce staff costs ; the social repercussions should be cushioned by using existing unemployment and welfare benefits, the resources of the industry ’ s solidarity fund ( the scope of which has recently been extended ), and those that will be made available by forthcoming legislation. a greater diversification of revenues could benefit from the provision of asset management services which, while fully satisfying the needs of customers, would also emphasize, in particular, the avoidance of conflicts of interest and, more generally, the protection of customers. this is not merely a legal requirement, it is the cornerstone of a fruitful and long - lasting relationship. clear and fully transparent transactions with customers help to strengthen the trust placed in banks, the ingredient on which their business hinges. these principles should be in place even when contract conditions change, which is only possible for a valid reason ; customers should be properly informed of these in order to make reasoned choices. mergers and acquisitions, especially among small and medium - sized banks, can certainly facilitate adjustments