*  *  *  Ladies and Gentlemen, The financial and sovereign crises have markedly changed our understanding of financial interactions in the Economic and Monetary Union. We have experienced how quickly apparent integration among Member States can unravel and how it can pose a threat to economic activity, job creation and price stability.
The degree of retrenchment was particularly seen in the cross-border financing of banks and sovereigns. At the height of the crisis, banks which relied on cross-border wholesale markets saw their funding dry up and sovereign debt holdings retrenched behind national borders. The implications for the real economy were highly damaging.