policy has an impact right across the real economy. this brings me back to my initial hypothesis – namely that monetary policy in the euro area may work better if other policy areas play their part. because the dynamics of the abs market are significantly influenced by the regulatory framework. and there is still work to be done here. let me say quite clearly : no one wants to have the complex, opaque products of the precrisis years. also, repackagings of the umpteenth tranche of a financial derivative should be things of the past. no one wants to promote a certain class of product just for its own sake. and securitised sub - prime mortgages in the united states certainly made an inglorious contribution to the emergence of the financial crisis. but the regulatory framework should be appropriate for the actual risk. and in this respect there are significant differences between current and previous securitisations and between the experiences in the us and those in europe. bis central bankers ’ speeches since the start of the 2007 – 08 financial crisis, the default rates of european abs were on average between 0. 6 % and 1. 5 %. in the us over the same period, they were on average 9. 3 % to 18. 4 %. european sme abs are even further below these default rates, at about 0. 1 %. the current rules lump all abs together and are much too conservative. they effectively question their existence. under the current regulatory conditions simple, transparent abs built on real assets face almost as many problems as much more complex financial products. the ecb has therefore, in cooperation with the bank of england, made a number of proposals for a better functioning securitisation market in the european union. that this approach has been welcomed in principle by the governments of the member states is shown by the joint working paper of the finance ministries in berlin and paris. the proposals are derived in part from the quality and transparency demands that the central banks place on abs, which can be deposited as collateral in monetary policy operations. and because we, as a central bank, have to protect our balance sheet, these demands have always been very high. the abs market is therefore a good example of how financial market policy can benefit our monetary policy and can also contribute to the recovery in the euro area. thus, two goals of good financial market policy in the european context can be named : it should be growth - friendly and it should support a successful implementation of monetary policy

yves mersch : for a european capital markets union – securing stability, overcoming fragmentation closing keynote speech by mr yves mersch, member of the executive board of the european central bank, at the zeit konferenz “ banken & wirtschaft ”, chamber of commerce and industry, frankfurt am main, 10 september 2014. * * * dr esser ( managing director, zeit verlagsgruppe ), dr raettig ( vice - president, chamber of commerce and industry, frankfurt am main ), ladies and gentlemen, i would first like to thank you for inviting me to deliver the closing speech of this high - calibre conference. i would do an injustice to the participants in the previous two panel discussions if i attempted to sum up the day ’ s deliberations. instead, i ’ d like to conclude by linking together financial market policy, which has already been discussed at length today, our monetary policy and the overall functioning of europe ’ s economic and monetary union. a common currency in a union of states such as the european union can only work in the long term if financial market policy, economic policy and fiscal policy interact at european level and in the member states within the framework of common rules. in this way, the independent central bank is given the opportunity to fulfil its monetary policy mandate. unfortunately we are quite some distance from this ideal condition. the crisis has shown us just how much the various policies affect each other. it has shown how easily bad budgetary management, excesses in the financial markets and a steady loss of competitiveness can reinforce each other. i am convinced that europe has understood this. but i ’ m not sure if it is ready to draw all necessary conclusions. without doubt, some changes for the better have taken place since the beginning of the crisis : most of the member states and in particular the programme countries have made significant efforts to put their budgets in order and improve their competitiveness. with the banking union we are now taking a decisive step at european level. it will increase the stability of the banking system in the euro area and protect taxpayers in the future more effectively against expensive bank bailouts by linking risk and liability more closely. however, the economic recovery is still some way off : in the last quarter, the economy stagnated in the euro area. unemployment is still at 11. 5 %. prices in august rose by only 0. 3 %, but inflation expectations are anchored. all in all, these figures