Accordingly, the defining of effective information and analysis co-operation and exchange procedures between the Supervisory and Resolution Boards is crucial for preventing dysfunctions, overlaps and frictions that hamper the proper functioning of the Banking Union. A Memorandum of Understanding between both agencies is currently being drawn up and will, I hope, contribute to achieving the necessary coordination. Lastly, we should sustain our efforts in order to achieve the degree of cohesion between the various components of the SSM that effective supervision requires. The SSM directly supervises 122 European banking groups, encompassing some 1,200 institutions. This is done with supervisory teams that draw on staff from various institutions, with highly diverse skill sets, seniority, experience and working conditions. Evidently, we must strive to fully develop a sense of mission to which all the component parts must contribute, under the leadership of the ECB and its Supervisory Board, without exclusions or unnecessary subordination. That is vital for maintaining the motivation and commitment of all SSM supervisory staff, irrespective of the authority to which they are attached. Indeed, they have to date shown exceptional professionalism. Final remarks In concluding, I will say that the past year has seen major headway in setting the Banking Union in place, but we still have some way to go. We must move ahead in a setting that will be complex for the European banking industry. Specifically, economic activity remains relatively sluggish, price stability is subject to significant risks and, as a result of this, interest rates are holding at very low levels.
Equally, savers would be adversely affected. Their sight deposits in so-called sovereign money accounts would not earn interest and services would be more expensive, so they too would lose out. Sovereign money would be like throwing grit in the gears of our credit system. Banks would not be able to react as flexibly to the demand for credit, and this would reduce consumption, investment and ultimately prosperity in our country. Monetary policy  A sovereign money system would also complicate the implementation of our monetary policy. The ‘debt-free’ issuance of money is based on an outdated idea of managing money supply and fails to recognise the advantages of the modern implementation of monetary policy. The issuance of ‘debt-free’ money would technically correspond to monetary targeting and would therefore be like turning the clock back to the last century. The fact that all major central banks today practise interest rate targeting is no coincidence but is built on the pertinent experience of the last decades. Interest rate targeting is superior to monetary targeting and guarantees a flexible supply of liquidity to the economy, particularly during times of crisis. 2 Furthermore, it is fundamentally unclear how the SNB could absorb liquidity in a sovereign money system if the money supply had previously needed to be significantly expanded. How can you reclaim money you have just given away?