of banks. however, significant challenges remain as money market activity continues to be abnormally limited. second, governments in a concerted and coordinated manner granted guarantees on new issuances of bank debt. the aim of this measure is to address funding problems of liquidity constrained but solvent banks. the granting of government guarantees on bank debt should facilitate the distribution of liquidity in interbank money markets, particularly by reducing globally the uncertainty on counterparty risk and by increasing the volume of tradable collateral in the private interbank market. the eurosystem contributed to this endeavour by proposing a set of recommendations on the appropriate framework for the granting of government guarantees. these included recommendations on overarching objectives as well as on parameters of the pricing system. from our perspective, such a framework should aim at : solving the funding problems of solvent but liquidity constrained banks ; preserving the level - playing field among financial institutions, avoiding market distortions ; and ensuring consistency with the management of liquidity by the eurosystem and with its operational framework, so as not to impair the implementation of the single monetary policy. banks have recently begun to make use of this funding opportunity. the current outstanding volume of government guaranteed unsecured bank bonds in europe amounts to €24 billion, of which €15 billion have so far been issued by the uk banks. more banks have already indicated their intentions to issue similar bonds this year. the issuances have been considerably oversubscribed and spreads of these government guaranteed bonds are lower than for secured bonds from the same country with a comparable maturity. thus this initiative is effectively representing a viable and less costly source of funding. the recapitalisation of banks government measures in this context should mainly be designed to strengthen the capital position of fundamentally sound banks, with the aim of improving the functioning and stability of the banking system and fostering an adequate flow of credit to the economy. member states have committed to providing banks with additional capital resources, by acquiring equity in the form of ordinary shares, preferred shares or other hybrid instruments such as subordinated debt. also in regard to these measures, the eurosystem has contributed with a set of recommendations on the main features and pricing of different forms of capitalisation instruments. these recommendations are without prejudice to guidance from the european commission aimed at avoiding distortions in competition in accordance with state aid rules of the treaty. in this context, the eurosystem considers that any recapitalisation should take into consideration the specific market situation of each

speech jointly shaping europe ’ s tomorrow introductory remarks by christine lagarde, president of the ecb, at the franco - german parliamentary assembly, 21 september 2020 frankfurt am main, 21 september 2020 dear president schauble, dear president ferrand, honourable members of the franco - german assembly, i would like to thank you very warmly for inviting me to join you today. as president of the european central bank and a french citizen living and working in germany, it is an honour to speak at this historic forum. this parliamentary assembly is an embodiment of the special relationship between our two countries and their commitment to european integration. i find it essential that the ecb constantly engages in two - way communication, especially with citizens ’ representatives. we need to make sure that the ecb ’ s voice is heard by the people and that the people ’ s voice is heard by the ecb. this is why events like today ’ s are so important for me. our regular interlocutor is the european parliament, to whom we are accountable under the treaty for our monetary policy tasks. transnational settings like this one give us a further chance to look past nation - specific concerns as we discuss europe ’ s future. the coronavirus ( covid - 19 ) pandemic is a crisis of unprecedented magnitude. many of you will recognise the famous words of jean monnet, one of the founding fathers of the european project, who said : “ europe will be forged in crises and will be the sum of the solutions adopted for those crises ”. this pandemic has proven him right once more. undoubtedly, europe has been strengthened during this crisis. but europe now has the opportunity to show that it can be more than the sum of the solutions adopted in this crisis. once again, monnet ’ s words offer inspiration : “ europe itself is only a step towards the forms of organisation of the world of tomorrow ”. with these words in mind, we must seize this invaluable opportunity to strengthen our union. we must shape the recovery from this crisis in such a way that our economies are fit for the world of tomorrow. the unique strength of the european project the pandemic and the measures to contain the spread of the virus have caused a contraction in euro area economic activity that is unprecedented in peacetime. while incoming data suggest that we will see a strong rebound during the third quarter, the strength of the recovery remains very uncertain, as well as uneven and incomplete. it