For example, just prior to the crisis, one of the big banks was operating with only seven dollars of capital for every 93 dollars of debt. Overall, the ratio of capital to total assets in conventional banks fell by almost half in the ten years after 1997. Much bigger balance sheets were being supported by the same amount of capital.
In addition to a stronger banking union, we need a stronger capital markets union to bolster private risk sharing. Well-developed and integrated capital markets lead to more risks being shared privately, they reduce systemic risk and they stimulate diversification of the funding mix of corporates. All this adds to our resilience as an economic and monetary  g  p  y  union.