Also, the greater degree of risk-pooling in the euro area would contribute to aligning financial responsibility with the pan-European decision-making process, which has already been set in place in the areas of banking supervision and resolution. The current situation is such that the ultimate backing for ensuring deposits in a failed institution depends on national institutions, while the responsibility for supervision and resolution falls on other pan-European institutions. Shortly after the financial crisis broke, Mervin King ironically pointed out that international banks tended to be global in life, but national in death. This quote would appear to still be applicable in the euro area. In a genuine banking union banks should be European, both in life and in death. As you know, the debate on the EDIS was rekindled in November last year owing to an article5 by the German finance minister, Olaf Scholz, in which he advocated its implementation. This was something which, in his own words, “was no small step for a German finance minister”. The German proposal actually referred to the introduction of a European reinsurance scheme rather than a fully pooled EDIS, and it was moreover subject to various conditions. In any event, the debate clearly remains open and differences persist among the European partners. But I hope and wish that, as on previous occasions, we can forge a consensus allowing us to complete this basic third pillar, introducing a truly common and, therefore, fully pooled EDIS. European banking consolidation and integration.
On the basis of the discussions at this conference, I draw the conclusion that there is no disagreement in the economics profession on this central tenet, but a  BIS Review 110/2006  1  lot of different views on how to organise the monetary analysis so that it has an appropriate influence on interest rate decisions. And this is the second issue mentioned at the opening of the conference. As was pointed out by Prof. Christiano and his co-authors Rostagno and Motto, including informational asymmetries, transactions costs and financial frictions in “state-of-the-art” macroeconomic models allows to better reflect the role of money and credit aggregates within such frameworks. I found compelling the argument that monetary analysis be used to monitor (and possibly offset) macroeconomic risks which are not related to price stability at shorter horizons, but which may nevertheless have important consequences for maintaining price stability over the medium and long run, like risks to financial stability. On this point in particular Lucas Papademos’ remarks yesterday evening were particularly stimulating. Although the use of such models for policy purposes is in its infancy, their further development is a promising way forward and should, therefore, remain an important field of ongoing research. However, at present the practical challenge of conducting the monetary analysis requires the adoption and employment of practical and fully operational tools. Conducting such an analysis has not always proven to be an easy task.