By the same token, a European deposit insurance system seems feasible only if the policy areas that influence the health of banks are European responsibilities. Otherwise, it will open the door to a situation in which the burden of bad national policy choices can be shifted to all Europeans creating severe moral hazard problems. 4.
The sovereign-banking nexus  Ladies and gentlemen, strengthening capital markets will bring about tangible benefits only if we reduce barriers to their functioning, not if we introduce new distortions to shift activity from banks to markets. By the same token, the regulation of banks will produce lasting success with regard to fostering financial stability only if we harness the disciplining forces of the market.