the uk, the independent ( “ vickers ” ) commission on banking has also proposed structural, quantity - based reforms : “ thou shalt not co - mingle retail deposit - taking and investment banking ”. yet even these notionally simple, structural proposals run some risk of backdoor complexity. for example, the consultation document accompanying volcker already runs to 298 pages. were these proposals to become mired in detail, they risk sinking, like the tower of basel, into the swamp. this is not because these proposals go too far but because they may not go far enough. these reform efforts have too many commas, semi - colons and sub - clauses. they would benefit from a few more full stops. that logic suggests cleaner solutions than are currently being implemented, if not than are currently being contemplated. strict size limits and forced separation of commercial and investment banking are two frequently cited such radical options ( haldane ( 2010 ), fisher ( 2011 ), johnson and kwak ( 2010 ) ). the debate on them has waxed and waned on both sides of the atlantic. a stalemate has been reached. having risen to a peak of almost three in 1928, the largest us banks ’ price - to - book ratios had by 1931 plummeted to below one. they remained close to these levels for several years afterwards ( chart 20 ). this discount implied that investors in the bank could improve their wealth by selling - off the banks ’ assets separately. investor pressures to separate began to mount. in response, a number of banks began selling off their equity brokerage affiliates, including the two largest banks, chase national bank and national city bank in 1933. a number of banks delisted their shares. this response, led by the market, paved the way for the passage of glass - steagall in 1933. as fuller ( 2009 ) puts it : “ divorce made a virtue of necessity and cursed and condemned bankers jumped at the opportunity to demonstrate their virtue ”. the market was leading where regulators had feared to tread. bank of england ( 2011 ). bis central bankers ’ speeches today, the situation is not so dissimilar. as then, many of the world ’ s global banks have fallen from heady heights to trade at heavy discounts to the book value of their assets. if anything, the discounts to book value are even greater today than in the early 1930s ( chart 20 ). as then, this conjunction is stirring market pressures to separate. bankers

luis de guindos : building the eu ’ s capital markets - what remains to be done speech by mr luis de guindos, vice - president of the european central bank, at the association for financial markets in europe conference, supervision and integration opportunities for european banking and capital markets, frankfurt am main, 23 may 2019. * * * it is a pleasure to be here today to share my thoughts on the future of capital markets union ( cmu ). cmu is undoubtedly a key project for the association for financial markets in europe ( afme ), but it is also important for the european central bank ( ecb ). the primary objective of cmu is to foster deep and diversified capital markets that provide a wide source of financing options to european companies and citizens and act as an engine for investment, innovation and growth. vibrant eu equity markets and truly diversified cross - border debt markets would complement traditional bank lending by fostering risk - taking and investment. 1 indeed, capital markets can, for instance, provide different forms of funding sources that are better tailored to firms ’ needs along their stage of development. a well - functioning cmu would also complement the banking union by providing channels to mobilise the large existing pool of savings towards financing the economy. it could help facing tomorrow ’ s challenges, such as climate change and digital innovation. within our economic and monetary union, more integrated capital markets can also help to cushion shocks to parts of the euro area, thereby enhancing the resilience of the euro area as a whole. 2 from the companies ’ point of view, cross - border ownership would mean that they have a wider pool of investors and potentially more stable sources of capital available for their investments. from the side of investors, diversified portfolios would help them hedge against country - specific risks. cross - border capital markets and banks would thus provide the level of private risk - sharing we need to ensure the long - term resilience of the euro area. in my remarks today i will argue : first, that financial markets are playing an increasingly important role in funding the economy, but more needs to be done to foster sustainable cross - border financial integration and risk - sharing ; second, that a revamped cmu agenda should be geared towards addressing the challenges facing europe, such as brexit, and ensuring that capital markets growth does not endanger financial stability ; and finally, i will highlight the important synergies that exist between the capital markets and banking union projects. how