First, to make the financial sector safer by strengthening the regulatory and supervisory framework – what has been termed “risk reduction”. And second, to deepen risk-sharing by creating the institutional conditions for more robust financial integration, which has been one key aim of the banking union.
It is this latter aspect, and why it matters for monetary policy, that I would like to focus on in my remarks today. The main point I would like to make is that we need a more integrated banking sector in the euro area to achieve greater macroeconomic stability.