First, the Single Supervisory Mechanism is an important pillar for an area-wide banking union, with a common supervisory regime led by the ECB, with local implementation in partnership with national regulators. A robust banking union also ultimately requires a common European deposit insurance system and the full financing of the Single Resolution Fund.
Second, the Capital Markets Union (CMU) agenda now takes on greater urgency, in order to enable deeper and more liquid markets in euro-denominated instruments. This is essential if the euro area is to reap the benefits from a more balanced financial system, in which equity and bond markets offer an alternative to banks in intermediating funds between savers and investors.