It has long been understood that deeper financial integration would lead to a better functioning of Economic and Monetary Union. And when the euro was first introduced there were encouraging signs that this integration was taking place. Price-based indicators of financial integration showed a pronounced increase, and the standard deviation of interbank lending rates across the euro area fell to close to zero. Quantity-based measures of financial integration only adjusted sluggishly, as crucial parts of the banking sector, such as retail banking, remained mainly national.
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|The Benefits of European Supervision.pdf||208.28 KB|