Sources: Swedish National Financial Management Authority, Swedish National Debt Office, Statistics Sweden and the Riksbank  16 [17]  Figure 3. Swedish public debt ratio low from an international perspective Public debt as percentage of GDP, 2020 300  300  250  250  200  200  150  150  100  100  50  50  0  0  Note. Maastricht debt for countries within the EU. Sources: Eurostat, IMF and the Riksbank  17 [17]
Moreover, within the euro area there would no longer be a host or a home supervisor, and this arrangement should ensure that cross-border allocation of capital and liquidity would be primarily driven by business considerations. Banks’ funding costs should start to indicate again their individual creditworthiness, without the premia that reflect their sovereign’s fiscal position or redenomination risk. A common resolution fund would decrease the too-big-to-fail problem and thus reduce moral hazard; furthermore, it would spread the burden of resolution rather than saddling any single sovereign with it. Finally, depositors would not need to consider shifting their funds across the continent in search of a safe haven, as all banks would offer the same insurance coverage. Of course, as with all structural changes and new institutional constructions, setting up a fully-fledged banking union will take some time. The most urgent component of the banking union is in my view the SSM, which should enter into force as early as possible in 2013 to allow the ECB to prepare for its new tasks, with full accountability and a governance structure that strictly separates monetary policy from supervisory decisions. I won’t go into the details of the current proposal put forward by the European Commission. For this, since we are at a research-oriented conference, I would refer you to the report 2 on the European Commission’s banking union proposals which has just been published by the Advisory Scientific Committee of the European Systemic Risk Board.