than three hours, some of the strongest measures in the history of the euro, creating our now almost famous pepp [ pandemic emergency purchase programme ]. on the fiscal front, with its next generation recovery plan of eur 750 billion, financed by a shared debt instrument, the european union demonstrated an unprecedented level of solidarity towards the countries most affected by the covid crisis. monetary policy is no longer the only game in town, and europe has reacted appropriately over the past year. the ecb ’ s balance sheet is now double the size of the fed ’ s as a percentage of gdp : page 8 sur 14 moreover, thanks to our social model and its higher automatic stabilizers, the overall 2020 fiscal stimulus in the euro area has been almost as strong as in the united states : yes, president biden ’ s american rescue plan is significantly bigger for 20212022. but according to many american economists, it could create a risk of the economy running above potential, “ making monetary policy more difficult to use in the futureiv ”, as expressed by olivier blanchard – who is not really known as a supporter of austerity. the new infrastructure bill, to be announced today, could have more positive long - lasting effects in two regards : it strengthens supply, including possibly in education ; it could reverse the race to ever more tax cuts in advanced economies. with that in mind, for us europeans, our main issue now is not the scale of our fiscal response but the speed of its execution. speed, once more, is our collective handicap. governments now need to implement the recovery plan to which they have agreed and they need to do so urgently. in other words, we in europe need to walk our talk. on a structural level, three major crises in the past ten years – 2008 - 2009, 2011, 2020 – have shown the need to complete the economic union in addition to the successful monetary union, starting with a permanent fiscal capacity. yes, a page 9 sur 14 big step forward has been made thanks to next generation eu. but the real hamiltonian moment will come when the existence of a permanent common fiscal capacity allows genuine countercyclical action to be taken to counter major asymmetric shocks. conversely – and not contradictorily –, adequate fiscal discipline is key to cope with economic reversals. look at germany, which fixed the roof while the sun was shining, and made appropriate use of its financial leeway during the crisis. there will be a debate

is because this floor – and consequently the standardised approach – would become the constraint for half of the international banks. i must stress that our goal is to finalise basel iii, based on improved models that remain risk sensitive, and not to move onto basel iv, which would use the standardised approach. therefore, an agreement must be reached on a lower output floor along with a tightening of controls over the banks ’ internal models, much like the targeted review of internal models ( trim ) that was approved for the single supervisory mechanism and the results of which we are more than willing to submit to peerreview. this stance is shared at the very least by other european countries such as germany and the netherlands, and by the european commission. international cooperation on financial reforms is a common good that has been extremely precious during these past eight years and is crucial to our future. the temptation to go back on it is extremely dangerous and would increase the risk of another financial crisis. in this respect, the current situation in the united states is worrying. generally speaking, the measures that will be effectively adopted and implemented by the new administration and the competent government agencies regarding financial and banking regulation still have to be clarified. there is a possibility that the regulations already finalised in basel such as the fundamental review of the trading book ( frtb ) or the net stable funding ratio ( nsfr ) could be called into question. unilateral deregulation would be nothing less than a lose - lose scenario with serious consequences for the stability of the global financial system as well as the competitive landscape for us and european banks. in view of this, the integration of a possible agreement on basel iii into european standards should be finalised while keeping a close eye on what the other major countries will do, starting, as you will have understood, with the united states. we must also avoid regulatory arbitrage. for non - bank players, significant progress is required on liquidity management by funds and asset management companies, on fintechs and more generally on the major digital platforms, which, if they carry out financial activities, will have to comply with similar regulations sooner or later. as for the financial markets, the decrease in market liquidity must be explained, and in doing so we must also consider the role of high frequency trading and its highly debatable social utility. a final word on central counterparties ( ccp ) : i would like to acknowledge the valuable proposals recently made by the european commission to insist that