Significant progress has been made on the Banking Union since 2012. The Single Supervisory Mechanism and the Single Resolution Mechanism have been established. At the same time, the financial stability of the euro area has improved. The capital positions of euro area banks have strengthened, as can be seen from Figure 3.
Figure 3: Euro area banks’ capital positions are strengthening (ppt slide) However, the work to strengthen the euro area financial system and to increase stability must continue. It is important to strive further to reduce the probability of shocks that could jeopardizestability of the euro area banking system. In this respect, priority should be given to strengthening the resolution and deposit guarantee schemes.