4 This does not mean that I do not consider finance vital for a healthy economy. A well-functioning financial system is essential to foster long-term economic growth. In this respect, last autumn was characterised by two milestones in Europe: the completion of the asset quality review and stress tests and the start of the Single Supervisory Mechanism, which went live on 4 November.
Repairing banks’ balance-sheets, together with the advancements in the design of the new resolution framework, the regulatory reforms improving capital and liquidity standards, as well as those concerning the shadow banking system (like securitisation and OTC reforms), constitute clear evidence of the commitment of the ECB and other EU policy makers to restore a well-functioning financial sector and create the conditions for an adequate flow of credit to the real economy.