The first one relates to household and corporate bank accounts, the second to the mechanism with which new money is put into circulation. The initiative calls for the creation of payment accounts for households and companies, to be held off-balance sheet by banks, just as securities custody accounts are now. These accounts would be fully covered by SNB money. The idea is that this would prevent bank runs and thereby improve the stability of the banking system. A bank run typically occurs when customers fear that their bank will no longer be able to pay out their deposits. As payment accounts in a sovereign money system would be covered by SNB money, there would be no more reason to doubt the security of these deposits. Yet, this does not mean that the financial system would become more stable overall. For example, the sovereign money system cannot prevent financial bubbles, as these are based primarily on investor misjudgement. Although the sovereign money initiative would somewhat complicate the financing of such misinvestments, it would not prevent them. Improved bank capitalisation, which is something we have advocated, contributes considerably more to increasing the stability of the financial system than a sovereign money system. The second element of the sovereign money initiative is the so-called debt-free creation of new central bank money. Money would enter circulation by the SNB gifting it, so to speak, to the Confederation, the cantons or directly to citizens. Such money distribution would fuel the politicisation of monetary policy.
I also call on banks to better monitor their pricing practices: margins must be sufficient to cover the costs and risks associated with housing loans. These points will be particularly closely monitored by the ACPR in 2020, and they are – I stress – of common interest to both you and us – in terms of financial stability. Lastly, to meet the challenge of profitability, French banks and insurers must be able to – at last! – operate in a genuine single financial market conducive to cross-border consolidation. And yet, the Banking Union is still half-finished: progress on resolution – second pillar – is at least as important as that on the deposit guarantee scheme – third pillar. Moreover, in the run-up to the arduous discussions on the future relationship with the United Kingdom, Europe must – more than ever before – assert its financial sovereignty. This requires the Capital Markets Union. I 2/3  BIS central bankers' speeches  would like to express my support for the priorities put forward in the “Next CMU” report and for the High-Level Forum (HLF) launched by the new Commission. If 2020 proves to be not only the year of Brexit, but also the year of a Savings and Sustainable Investment Union, Europe will have turned the problem into an opportunity.