. progress on fiscal and external rebalancing and on structural reforms has also been very significant. looking ahead, we need to prevent any return to the complacency of the past. this means that we must make fuller use of the tools at our disposal in the economic governance framework, at the eu and the emu level. the european parliament and national parliaments have a key role to play in this respect, in the context of the 2014 european semester. let me reassert here that the excessive deficit procedure ( edp ) and the macroeconomic imbalance procedure ( mip ) are equally important and should be strictly enforced. the lesson of this crisis is that the cost of not intervening where imbalances are identified would be a more brutal adjustment later. the role of parliaments in the “ fourth stage ” of emu the crisis revealed that national policies need to be a matter of common concern. therefore, national policies need to be discussed at the european level and the european dimension needs to be brought into national debates. national parliaments and the european parliament are the natural fora for such exchanges. there is clearly a demand for this. the most recent eurobarometer data ( autumn 2013 ) indicates that an overwhelming majority of euro area citizens ( 79 % ) support a stronger coordination of economic policies among euro area countries and 63 % support the emu and the euro. at the same time, two - thirds of europeans consider that their voice does not count in the eu. at the ecb, we attach great importance to our accountability, as reflected in our close dialogue with the european parliament and most recently in the inter - institutional agreement with the european parliament on the accountability of the ssm. as regards monetary policy, the governing council of the ecb is examining how it can enhance the transparency of its decision - making processes by publishing an account of its discussions. i am personally convinced that this would help the public understand our decisions better. at the same time, the european parliament and national parliaments have a responsibility to engage with the public on the political and economic implications of economic and monetary union. above all, only in a truly european public space can common solutions emerge. bis central bankers ’ speeches let me now conclude. 15 years ago the third stage of emu started. it was believed to be the “ final ” stage. the crisis made clear that we needed to embark on what i would call the “ fourth stage ” of emu, as described in particular in the

conditions, it is not yet sufficient to compensate for the low interest rate margins. the continued economic recovery should, however, reduce the negative impact of cyclical factors over time, as banks ’ balance sheets adjust. but most importantly, a number of structural challenges continue to dampen bank profitability. these factors vary across countries and banks and include incomplete business model adjustments, cost inefficiencies and excess capacity. the stock of npls also remains high at some banks. let me elaborate on each of these issues in turn. starting with the issue of business model adjustment, our analysis shows that, in the past, diversified banks have been more successful in generating higher revenues from net fees and commissions and trading when faced with pressure on interest income. this is perhaps no surprise, as banks engaging in custodian, asset management or investment banking activities are likely to be better able to gear themselves towards fee - generating activities, whereas commercial banks may not have access to such opportunities for diversification. 1 at the same time, one has to acknowledge that it is not only the low yield environment and lack of income diversification that is challenging banks ’ business models. the rapid pace of technological advances and the ensuing change in the competitive landscape are both a key strategic opportunity and a challenge for banks. for example, a shift from branch networks towards digital banking has enabled many banks, notably in the nordic countries, to reduce costs while maintaining sound customer bases and market shares. but clearly, a successful transformation is likely to hinge on the support of beneficial structural factors such as labour laws, how the market is structured and the digital readiness of the economy. policy action may thus have a role in supporting these conditions. incumbent banks also need to be prepared for the increasing competition from the non - bank financial sector and “ fintech ”, fuelled by the increasing role of technology in financial services. increased competition in lending, investments and payments is bound to increase pressure on retail banking revenues. it will subject deposits to more intense price competition, and may erode revenues related to overdrafts and payments. adjustments to business models are closely linked to the second challenge : the need to improve cost efficiency. i already mentioned that digitalisation can enable substantial cost savings. however, on aggregate, euro area banks have so far been unable to meaningfully reduce operating costs in the aftermath of the financial crisis. in fact, euro area significant institutions ’ operating expenses have increased by over 5 %, on aggregate, since 2010, despite a