As a banking supervisor, the ECB helps to make banks safer, sounder and more resilient. But as I have said elsewhere, financial stability is more than the sum of its parts.6 Even if all banks were stable, the financial system could still be a bit shaky. Microprudential supervision can only be part of the answer. But it is still important.
In any event, one consequence of these improvements in efficiency has been a temporary ability of many businesses to meet increases in demand while paring existing workforces and continuing to exercise restraint on capital spending. *** If businesses are to spend and hire more vigorously, they will need to be convinced that economic growth can be sustained beyond the short run.