for example, the national large exposure limits on intragroup exposures that are currently in place in several european countries prevent banks from transferring liquidity flexibly within the group. we need further harmonisation to address such practical obstacles, also given that the regulation already contains appropriate prudential safeguards for applying liquidity waivers. third, banking union as a single jurisdiction. in coherence with the current common supervision and resolution mechanisms, the international regulatory framework should treat the banking union as a single geographical area for the purpose of calculating capital surcharges of global systemically important banks. banking union and the benefits of more integration the banking union is key to reaping the benefits of cross - border banking activities in the monetary union. but while we have made significant progress, the banking union is not yet complete. we still need a backstop for the single resolution fund ( srf ) to underpin its credibility, and a common fully mutualised european deposit insurance scheme – edis. while discussions are progressing on the srf backstop, the negotiations on edis have stalled. that is unfortunate, as both elements would improve financial stability in the euro area by increasing confidence and reducing the likelihood and cost of a bank failure. with edis, this would mainly happen via three channels. first, depositors would trust that their deposits are safe, regardless of the location of the bank in question. this would help break the link between banks and sovereigns. second, pooling resources at the banking union level would enhance the banking sector ’ s resilience to shocks. some argue that this would lead to unwarranted systematic transfers between banking sectors. however, banks ’ contributions to the deposit insurance fund can be designed to reflect their relative riskiness, in terms of npls or sovereign exposures, for example. 9 third, edis would remove the current misalignment whereby supervision and resolution have been elevated to the european level, while depositor protection remains a national task. but it ’ s not all about the banking union. we need to continue making progress with other important initiatives to work towards a more complete financial union. the capital markets union is another element that will foster cross - border financial integration. in the past, banks and capital markets were sometimes seen as competing with each other for limited investment opportunities. 10 some even went further – seeing capital markets as a threat to traditional banking models. however, banks and capital markets can complement each other in financing the real economy. seen

philipp hildebrand : developments in the current financial crisis summary of a speech by mr philipp hildebrand, vice - chairman of the governing board of the swiss national bank, at the swiss funds and asset management forum, berne, 2 april 2009. the complete speech can be found in german on the swiss national bank ’ s website ( www. snb. ch ). * * * the financial market turbulence, which began some 20 months ago, has grown into the largest and most complex crisis since the 1930s. the real world economy is now feeling the full force of this financial crisis. we are currently experiencing a very difficult period, although there are a few signs that the global economy could possibly be close to the cyclical trough. however, the route to recovery is unlikely to be straightforward, and the downside risks to growth remain considerable. throughout the world, governments and central banks have taken steps to stabilise the financial system. in addition, a large number of countries are pursuing fiscal policies aimed at stimulating demand. central banks have lowered interest rates rapidly and sharply, and, in some cases, taken exceptionally far - reaching measures to alleviate the economic downturn. cumulatively, these measures will ultimately help to ensure that the global economy returns to a growth path. the swiss national bank ( snb ), too, has made decisive use of conventional monetary policy tools and innovative, far - reaching monetary policy measures. we will deploy these measures aggressively for as long as this remains appropriate, both within the context of our monetary policy strategy and with a view to our inflation forecast. we are aware that long - term risks are associated with the option we have chosen for fighting this crisis. yet the snb is profoundly convinced that the risks associated with the option of “ doing too little ”, let alone the option of “ doing nothing ”, would have been far greater. as soon as a return of the swiss economy to its long - term growth path can be foreseen, the snb will certainly not hesitate to redirect its monetary policy accordingly.