Indeed, the banking union, together with the new regulatory standards, will help to mitigate the financial stability risks which arise when markets become more integrated and which the previous regulatory and supervisory framework failed to avert in the period leading to the crisis. A complete banking union requires four building blocks.
5  See, for example, F. Heider, M. Hoerova, and C. Holthausen (2009), “Liquidity hoarding and interbank market spreads: The role of counterparty risk”, ECB Working Paper, 1126. BIS central bankers’ speeches  7  The first building block is the establishment of a single rulebook. Such a single rulebook now exists with the agreement reached on the Capital Requirements Directive IV.