that we can narrow the policy gap between systemic risk assessments and their translation into risk mitigating policy actions, this will ultimately enhance the financial system ’ s resilience to adverse disturbances. in this sense the political support for these reforms is absolutely essential. conclusion let me conclude. monetary and fiscal policies, through vigorous and swift action at the peak of the financial crisis, have avoided a free fall in economic activity and a further drying up of financial markets. as we gradually seem to be leaving the extraordinary circumstances behind us, monetary and fiscal policies must return to their normal mode of operation. will that normal mode look different from the one before the crisis? as for monetary policy, you can be assured that the ecb will monitor all developments carefully and continue to gradually phase - out at the appropriate time its enhanced credit support measures, without hampering the functioning of financial markets. let me also assure you that maintaining price stability remains our primary objective. at the same time, let me also emphasize that central banks must become more wary of financial market risks and their macroeconomic implications to the overall benefit of achieving the monetary policy objective. as regards fiscal policies, consolidation efforts need to be implemented timely and credibly, and as in the past with a particular focus on the expenditure side. as to macroprudential policies, the recent crisis has strikingly illustrated the interconnectedness that characterizes the financial system. this has reaffirmed the need to strengthen macroprudential policies, i. e. the focus on the systemic nature of risks and their mitigation to reduce the chances on such a crisis from happening again need. finally, let us not forget the importance of self set standards and rules by the financial markets themselves. importantly, the financial industry must be aware of their own responsibility and need to draw the right lessons from the crisis for future practises. thank you for your attention.

public support within the context of bank resolution across the union. but its application should not unduly delay or supersede resolution measures, by which financial stability could be at risk. we have to bear in mind that once the srm is fully operational, resolution decision will be taken at union level, thus preserving a level playing field and respecting the single market. let us also keep in mind that we operate in principle with the funds from the private sector. fourth, indeed only in exceptional cases do we see temporary access to fiscal resources as a helpful element of the srm ’ s backstop arrangements. remember the proposal from last year ’ s four presidents ’ report on a genuine emu, which suggested a credit line from the european stability mechanism ( esm ) as a possible option for euro area countries while fiscal neutrality will be respected in principle. how does esm direct bank recapitalisation fit into this framework? the answer is that it is the very last line of defence : it can only be used after bail - in has been exhausted, and only when going via the national budget would seriously damage a country ’ s fiscal sustainability. as such, it helps break the bank - sovereign nexus, but once agreed will operate within the new bail - in framework. the “ new normal ” remains that, wherever possible, the private sector pays. conclusion let me now conclude. a successful policy regime is based on an effective accord of rules, institutions and instruments. we have this for the single market in goods and services, where the rules are laid down by eu legislation, the commission oversees them, and it has various instruments, like infringement proceedings, to enforce its decisions. and we now need to build a similarly effective regime for the single market in capital. we already have some new rules in place, for instance on capital requirements. we are on the verge of agreeing to a new mechanism for supervision. but now we need to make sure that bis central bankers ’ speeches we have a strong authority for resolution, and that it has proper instruments to do its job, like the bail - in tool from 2015. willy brandt once said that “ what we want is a europe of daily reason and of common sense, and we must be prepared to state this and, where necessary, to act. ” it is my conviction that banking union is one of the clearest examples of where elevating powers to the european level is common sense : it brings benefits for citizens, who have a safer banking sector ;