It is now high time that these other aspects of banking union are also completed. Otherwise, we would make the same mistake that was made when the euro was introduced. Back then the consequences of having a single currency were not fully reflected in the Union’s institutional design. Internal inconsistencies made our union much more vulnerable than it needed to be when an external shock hit it. If the SSM is of great importance to the singleness of money, it is also greatly important to the singleness of the market. The single market is, as the euro, a central and irrevocable creation of the European Union. But, as is the case for the euro, its irrevocability, to remain unquestionable, needs being buttressed by appropriate and credible institutions. BIS central bankers’ speeches  1  The SSM is one such institution. And that is why it was – and remains – open to participation by countries which are not in the euro area. Before the crisis, the free passporting of banking services across borders relied on the principle of home supervision, host recognition. This principle, however, requires equal standards of supervision across borders, and mutual trust in the quality of supervision. That trust did not always stand the test of the crisis. A single supervisor, applying homogenous methodology across institutions, internalises mutual trust. Its establishment was thus one answer, and certainly an effective answer to this challenge.
A single supervisor builds trust not only between supervisors, but also with shareholders and other stakeholders, including the fiscal authorities that, in the past, were too often assumed to be the shareholders of last resort of their national financial system. The importance of the SSM to uphold the single market serves as a reminder that the objective of having a robust supervisor is not just to make banks safe. The objective is to make banks safe so that they can safely access resources and use them to fund innovation, investment, and growth. Similarly, creating a single supervisor was not an objective per se. But it was necessary so that the integrity of the single banking market is not questioned. What I have said of banking can be extrapolated to other areas of finance, which is one reason why, alongside Banking Union, the Capital Markets Union, championed by Commissioner Hill, also needs to be implemented fully and as quickly as practical. I am not saying “as quickly as practical” for no reason. If we want to restore in Europe the stability that is the premise for a return to prosperity, we need to consider the economic costs entailed by recurrent uncertainty over the operating environment of European firms. Not only does it cause a loss of growth today, but by impeding investment, it may also weaken our potential in a more lasting way.