second, we urgently need several targeted changes to further improve the framework for dealing with banks in crisis. for example, we need to strengthen the crisis management framework for small and medium - sized retail banks. resolution may pose challenges for these banks, whose business model may make it difficult to issue sufficient amounts of liabilities that can be bailed - in. and as liquidation frameworks currently differ across member states, it will also be important to promote convergence for bank insolvency procedures so as to ensure consistency in the treatment of creditors. but aside from the srf backstop and the targeted changes to the crisis management framework, today i will focus on the key missing element of the banking union : a common european deposit insurance scheme. regrettably, we have made little progress on this front. let me briefly recall why an edis is so important. first, without an edis, depositor protection remains dependent on bank location and on national deposit insurance schemes. this could distort the level playing field : if national funds are exhausted, governments are likely to provide the back - up support and the differences in fiscal strength across member states could result in differing levels of depositor confidence. second, national deposit insurance funds would be depleted more quickly than a larger and diversified european fund, in particular in the case of a local shock. continuing to rely on national schemes could exacerbate the bank - sovereign doom loop, given that public finances might be used to backstop national funds. third, a misalignment persists between centralised bank supervision and resolution in the banking union, on the one hand, and national deposit insurance, on the other hand. with an edis, all three functions would be aligned at the banking union level, helping to ensure consistency. clearly, the reasons in favour of an edis were already relevant before the covid - 19 crisis, but they have become particularly important now. particularly at this juncture, we need tools to enhance confidence in the banking system, preserve financial stability and avoid exacerbating the bank - sovereign doom loop. edis would significantly contribute to all these goals by ensuring a uniform protection of depositors across member states, reducing the likelihood of bank runs 2 / 3 bis central bankers'speeches through a confidence enhancing mechanism, and thus avoiding potential vicious spirals that aggravate negative shocks in individual member states. capital markets union creating a genuine capital markets union is a second major priority. at this point a single eu capital market

. the evidence is clear : banks that are safe and sound are better equipped to lend to the real economy. banks that are well capitalised and resilient are better placed to compete in international financial markets. and banks that have state - of - the - art governance 6 / 7 bis - central bankers'speeches structures have better forward - looking risk assessments, can more easily shield themselves against unforeseen events, and can continue to provide services to their customers, including during periods of structural change and in times of crisis. 1 yellen, j. l. ( 2024 ), " the importance and strength of the transatlantic alliance ", remarks at frankfurt school of finance and management, 21 may. 2 veron, n. ( 2020 ), " banking regulation in the euro area : germany is different ", 11 may. 3 bafin ( 2021 ), " reform as a long - distance race ", 8 december. 4 research shows that unresolved npls are associated with lower output growth and slower dynamic recovery. see ari, a., chen, s. and ratnovski, l. ( 2019 ), " the dynamics of non - performing loans during banking crises : a new database ", imf working papers, no 19 / 272, international monetary fund, december. 5 tuominen, a. ( 2024 ), interview with il sole 24 ore, 28 march. 6 elderson, f. ( 2023 ), " powers, ability and willingness to act – the mainstay of effective banking supervision ", speech at the house of the euro, brussels, 7 december. 7 / 7 bis - central bankers'speeches