If, on the other hand, we understand political union as the establishment of an entity that resembles the traditional nation state, the European Union may still have some way to go, if indeed this is the direction that Europeans want to take. Today’s Union is not a European Federation, for example, or a United States of Europe, with a constitution and a single executive. The euro marks the achievement of full integration in the monetary field. In purely functional terms, it is therefore an end point, rather than an intermediate step. However, with the euro, we now form a “Schicksalsgemeinschaft”, a community with a shared future. Our economies are linked, and so our policy decisions have become a matter of concern for all. We have a legitimate interest in developments and political actions in other euro area countries, since we are affected by them - for better or for worse. If I may use a “domestic” metaphor, the marriage in which the euro has joined our countries is about more than just living under the same roof, it is about sharing a common vision and about managing life together. Concluding remarks In the context of the current attempts to help the European Union work smoothly and on a sustainable basis following its future enlargement, I would like to conclude by mentioning the draft Treaty establishing a Constitution for Europe. The process of European integration has delivered half a century of stability, peace and prosperity.
But, going beyond that, the FSB has encouraged and is sponsoring an exercise on effective supervision of SIFIs, Significantly Important Financial Institutions. BIS Review 148/2010  1  A remarkable fact is that although the style of banking supervision varies enormously across the world, almost nothing seems to have been done to get to the bottom of the question of which approaches are the more effective – having an army of on-site examiners, such as for example in the United States; or relying on offsite analysis, which tends to be the pattern in much of Europe. An exercise led by Julie Dickson for the Financial Stability Board is producing an evaluation of what is needed to supervise the largest firms in the world effectively. The idea is that that will either get encapsulated in an FSB code or in a re-draft of the Basel Core Principles for Effective Supervision. 3. Capital and liquidity  The third element is capital and liquidity. Virtually all crises have at their root over leverage in the financial sector and excessive maturity mismatch. We need to overhaul the corresponding policy instruments –capital and liquidity requirements. On liquidity, Basel is introducing an accord for minimum liquidity requirements for the first time; this is about a quarter of a century after it was first contemplated and so rather overdue, but therefore very welcome. There is an awful lot of debate around this still. Many in the industry – in the banking industry – have been resisting it. But this will happen.