There is no end to conferences that take the 10th year anniversary of the Lehman Brothers’ failure as motivation to discuss financial stability and the regulatory reforms of the past decade. One of the highlights has certainly
been a conference on Managing Financial Crises: Where Do We Stand?, at the National Bank of Belgium, co-organised by the
ECB, Solvay Brussels School of Economics and Management, Toulouse School of Economics , which I had the pleasure and honour to participate in. While split into five panels, the same topics came up again and again – how to make the Eurozone
and its financial system more resilient. There has been enormous progress in strengthening banking regulation after the Global Financial Crisis and the Eurocrisis, but more is needed to make the Eurozone a sustainable currency union. The 7+7
proposal of combining more risk-sharing with more market discipline was the starting point for several discussions during the conference. It is clear that while politically risk sharing (in the form of, e.g., a common unemployment reinsurance
and a Eurozone level deposit insurance) and market discipline (help for countries in dire fiscal position only with conditionality) are seen as contrasts, in reality they complement and reinforce each other. Market discipline can only be enforced if
credible and it can be more credible with risk sharing. In this context one important consensus that came up again and again was that the banking union has to be completed, with common deposit insurance and a backstop for the resolution fund. Similarly,
fiscal and capital market risk-sharing are not substitutes but can very much complement each other.