When we talk about the degree of financial integration in the euro area, we are looking at the extent to
which financial services are available under the same rules and conditions across the region. A
well-integrated financial system implies that assets with the same risk-return characteristics have the same
prices, irrespective of the country in which they are traded. This contributes to the uniform transmission
of the ECB’s monetary policy across the euro area.
How does it affect you?
More advanced financial integration across euro area countries can mean that market participants have greater
investment opportunities and are able to diversify financial risks beyond their national borders. Retail
bank interest rates are more equal for consumers across borders and businesses may have easier access to
money to expand. In sum, financial integration is important because it makes the European economy more
efficient by ensuring a single European market for financial services.
What is the ECB’s role?
The ECB and the euro national central banks – the “Eurosystem” – are legally mandated to support financial
integration in Europe. This is done by:
advising on the legislative and regulatory framework for the financial system
acting as a catalyst for private sector activities
providing central bank services that foster financial integration
carrying out in-depth analysis on the state of financial integration.
The results of these analyses are published every two years in a report on financial
integration and structure in the euro area.
Speech by Isabel Schnabel, Member of the Executive Board of the ECB, Financial Stability Conference on “Stress, Contagion, and Transmission” organised by the Federal Reserve Bank of Cleveland and the Office of Financial Research
Keynote speech by Luis de Guindos, Vice-President of the ECB, at the CIRSF (Research Centre on Regulation and Supervision of the Financial Sector, Portugal) online Annual International Conference 2020 on Major Trends in Financial Regulation