Today, I will first look back at the measures taken by the ECB since the beginning of last year to fulfil its mandate. I would then like to discuss the capital markets union project, which, if pursued with sufficient ambition, could unleash the benefits of more robust financial integration and improve the transmission of our monetary policy.
Recent research by the ECB shows that during the sovereign crisis, banks in stressed countries increased their holdings of domestic sovereigns.4 This was particularly marked for publicly owned banks and recently bailed-out banks. As the price of stressed sovereign bonds fell, these banks were forced to deleverage, reducing their lending.