different rules for corporate governance contribute to fragmentation. these issues warrant consideration to facilitate financial reintegration. the single resolution mechanism as an essential complement another essential element in building a more integrated european banking market is greater harmonisation of how non - viable banks are resolved. this requires a consistent legal framework between countries and a single resolution mechanism to enforce that framework. the first part has already been agreed by governments ; the second part, the srm, needs to be pursued as a matter of urgency. a robust srm would encompass all banks established in member states participating in the ssm. it would have at its centre a strong and independent single resolution authority that can act evenly across countries and take decisions in the european interest. and it would have adequate powers, tools and financial resources to resolve institutions swiftly and effectively. the key to an effective resolution regime is that it creates legal certainty, consistency and predictability, thus helping to avoid ad hoc solutions. to this end, there are two points where i think more certainty is needed. first, while the new eu resolution framework provides the appropriate resolution toolbox, it would be better to have it available right from the start of the srm. i therefore support implementing the bail - in tool well before 2018. second, to price risk properly, investors need to see a clear pecking order in resolution financing – running from capital write - downs and bail - in to use of a bank - financed single resolution fund. however, it would be difficult to make such a pecking order credible without a public backstop for the single resolution fund for exceptional cases where its resources are exhausted. otherwise, investors may suspect that governments would at some point be forced to step in again. such a backstop would still result in the private sector paying as any borrowing by the fund would have to be repaid, if needed through ex post levies on the banking sector. in other words, the future system would not be about bail - outs or mutualisation – it would be fiscally neutral ; the taxpayer would not pay. conclusions let me conclude. i have discussed today the benefits of a european perspective to our current challenges. this is not the perspective of idealists. rather, in a closely integrated monetary union, it is the perspective of realists. a european perspective is firmly enshrined in monetary policy. and it is equally enshrined in our approach for establishing the ssm. we will overcome fragmentation to create a truly integrated financial market. there is still

mario draghi : building stability and sustained prosperity in europe speech by mr mario draghi, president of the european central bank, at the event entitled “ the future of europe in the global economy ”, hosted by the city of london corporation, london, 23 may 2013. * * * ladies and gentlemen, introduction let me begin by thanking you, lord mayor, for this kind invitation. i have always been deeply impressed by the sense of commitment that motivates distinguished city of london professionals such as yourself to take on the demanding role of your office. no doubt this sense of responsibility to the community has been instrumental in delivering the longevity and stability of the city of london corporation. this institution has played an important role in developing the square mile into the premier financial centre of the world. i cannot say which of the two sets of arguments is stronger, the economic or the political ones, but what i can say is that europe needs a more european uk as much as the uk needs a more british europe. to limit myself to matters that are close to my own professional capacity, let me note a few reminders of the depth of the interconnection : more than twice as many euros are traded in the uk ’ s foreign exchange market as in all the countries of the euro area combined and more than in the us. all major euro area banks have important branches in the city of london – and uk banks are leading players in financial markets of the euro area. around 40 % of the deposits placed with euro area banks from outside the euro area come from the uk. at the same time, an equally large share, i. e. 40 %, of all loans granted by euro area banks to non - euro area residents goes to uk borrowers. in fact, 40 % seems to be a key figure when looking at the uk ’ s linkages with the euro area : it is also approximately the share of the euro in all the foreign currency - denominated loans as well as deposits in the uk. finally, the euro area is the uk ’ s largest export market. it may not come as a surprise to you by now that no less than 40 % of all the goods and services exported by uk businesses are delivered to euro area countries. in 2012 this amounted to 240 billion euros, or just short of 200 billion pounds. with such deep interconnections, the uk and the euro area share a common interest : stability in the functioning of our economic system and particularly of our financial markets