, the european banking authority ( eba ( european banking authority ) ) and the single resolution board ( srb ( single resolution board ) ) confirmed that common equity instruments would be the first in line to absorb losses. on 18 april, the european commission published a proposal to adjust the eu ( european union ) crisis management and deposit insurance ( cmdi ( crisis management and deposit insurance ) ) framework, including broadening the scope of the resolution framework to smaller and medium - sized banks. the proposal aims to address the shortcomings of the framework that were identified in past crisis situations. this has the potential to enhance the credibility of the framework and strengthen market discipline. at the same time, as the reforms consider changes to well - established deposit insurance schemes, it is important to avoid unwanted side effects. let me recap : recent events have highlighted weaknesses in the banking sector during periods of monetary policy tightening. they have underscored the importance of adequate asset and liability management. banking supervision needs to remain vigilant in a very dynamic environment. consistent implementation of the new basel iii framework at the global level is equally important in this regard. 3 towards a single european capital market ladies and gentlemen, let me now turn from the banking sector to capital markets. the free flow of capital is essential for the functioning of a monetary union. moreover, integrated capital markets can contribute to safeguarding financial stability. this is because improved cross - border financing, especially through equity, can help to share risks and cushion economic shocks. and capital markets can help us deal with the challenges that lie ahead. think about digitalisation or the need to green our economies. these far - reaching transformations will require massive investment that will primarily have to come from the private sector. for example, delivering on the european green deal alone will require additional annual investment of €520 billion across the eu ( european union ) until 2030. to mobilise these sums, europe needs a stable and resilient banking system and deeper and more liquid capital markets. the eu ( european union ) capital markets union would promote capital market financing to complement bank lending. unlike in the united states, bank - based financing still makes up the lion ’ s share of funding in europe. there is a lot of untapped potential in european capital markets. consider insolvency regimes, for instance : the significant differences in national insolvency frameworks across the eu ( european union ) pose a major obstacle to capital market integration in europe. yet there

global financial centres until digital intermediation 7 / 9 bis central bankers'speeches on the continent matches supply and demand in a more effective way than traditional trade practices. we need to create digital hubs and platforms that are more effective than in the analogue world. this requires not only future - proof digital infrastructures but also a pooling of all parties ’ digital power of innovation, be it financial institutions, infrastructure providers, it service providers or fintech. this takes place already, as we could see in the recent past. third, a competitive legal framework : the principle of specialisation and cooperation as well as a high - performance digital infrastructure are only two components of a whole range of elements that a “ digital finance hub of europe ” requires. in spite of all efforts aimed at harmonisation in the eu, in many areas continental europe still does not have a joint, internationally applicable legal framework that can compete with english common law. there are debates at the eu level as to whether the 28th regime could be used as an alternative to the traditional harmonisation of legal provisions. this refers to a private law which does not replace national legislation but provides an alternative at the european level, such as the legal form “ european company ” ( societas europaea, se ) instead of a public limited company. the contractual parties can decide independently whether they want to apply such a law. this is of particular interest in areas in which complete harmonisation does not appear possible or is not easy to achieve. a 28th regime for business on a continental platform could be an option. the aim of further harmonising the legal framework must be to ensure that there are no additional costs for cross - border transactions within the eu – either in a direct form, by means of taxes or fees, or in an indirect form, for instance by requiring legal advice. fourth, compatible it structures : the merging of existing it architectures with the least possible friction represents another challenge. this requires a high level of standardisation. ideally, technical or administrative issues within the eu should not play any role in investment decisions. fifth, market forces have to take effect : specialisation and cooperation, digital networking, a competitive legal framework, and compatible it can help a digital city of europe to grow. however, a project like this can only succeed if it is market driven. the market has to set the agenda. policymakers could assume the role of a catalyst, sitting the main players down at one table. in addition to market participants and representatives of