However, we need to make sure that the expansion of the non-bank sector does not endanger financial stability. Increased risk-sharing is highly desirable, but we should not forget that greater public risk-sharing is only possible with less, and not more, sovereignty.
Risk-sharing, whether in the form of a safe asset, a central fiscal stabilisation tool, a fund to insure against unemployment, or a truly European deposit insurance scheme, should proceed simultaneously with risk reduction, such as the reduction of non-performing loans or national discretions in supervisory and resolution rules for banks.