Financial Integration in Europe. April 2008

The European Central Bank (ECB) published the second issue of its report entitled 'Financial Integration in Europe', April 2008. The main purpose of this annual publication is to contribute to advancing European financial integration. In addition, the report aims to raise the public’s awareness of the Eurosystem’s role in supporting this European Union objective.

The ECB has a strong interest in financial integration in Europe, and particularly in the euro area, because it facilitates the performance of the Eurosystem’s core tasks. Financial integration contributes to the smooth implementation of monetary policy throughout the euro area and to the stability of the financial system; it is also fundamental to the Eurosystem’s task of promoting the smooth operation of payment systems. Integration also fosters the development and efficiency of the financial system, thereby raising the potential for stronger non-inflationary economic growth.

The report consists of three main chapters. The first chapter assesses the state of financial integration in the euro area, based on a set of indicators developed by the ECB. [1] The second chapter, entitled “Special Features”, includes in-depth assessments of selected topics. The current edition contains four “Special Features” dedicated to (i) “Financial development: concepts and measures”, (ii) “The STEP initiative”, (iii) “Integration and development of mortgage markets in Europe”, and (iv) “Integration of large-value payment and securities transactions: TARGET2, TARGET2-Securities and CCBM2”. The third chapter provides an overview of the main Eurosystem activities in the field of financial integration in 2007. These activities are grouped into four broad categories: (i) giving advice on the legislative and regulatory framework for the financial system; (ii) acting as a catalyst for private sector activities; (iii) enhancing knowledge, raising awareness and monitoring the state of European financial integration; and (iv) providing central bank services that also foster European financial integration.

• Primary Source