Risk-sharing in EMU should be enhanced along the lines proposed in the Five Presidents’ Report in 2015 and other proposals, such as those released by the Jacques Delors Institute in the autumn of 2016. Private risk-sharing can be encouraged by actions that lead to a true financial 21 / 23  BIS central bankers' speeches  union with fully integrated financial and capital markets.
The banking union still has a sovereign virus, as Daniel Gros from the Centre for European Policy Studies once quipped. To strengthen the banking union’s immune system, we need to put an end to the preferential treatment afforded to sovereign debt.