BIS central bankers’ speeches  1  ensures well-functioning cross-border money markets. Yet we have seen during the crisis that without a euro area-wide approach to financial governance, financial markets can end up re-nationalising. A strong banking union can help mitigate several sources of this fragmentation.
A single supervisor should enhance transparency and thus increase trust in cross-border lending, while supervisory ring-fencing or national asset-liability matching would no longer be relevant given the SSM’s European focus. In addition, an effective single resolution mechanism would help attenuate the infamous bank-sovereign nexus.