Nevertheless, some developments have given rise to concerns that market functioning has deteriorated. Specifically, with the decline in the amount of JGB transactions, the number of days when inter-dealer transactions of newly-issued 10-year bonds were not settled has been growing at an unprecedented pace since the beginning of 2018.
The objective is effectively threefold: reinstating beyond doubt the soundness of the banking system; re-integrating the banking system; and delivering a supervisory and resolution framework that will prevent a repeat of the past risk build-up. All core elements should fall into place swiftly to reap the full benefits of a banking union. The stakes are too high to afford undue delays.