Another indicator to measure the degree of integration in euro area equity markets is the relative importance of sector versus country-based investment strategies. The indicator is derived by calculating and comparing the cross-sector dispersion with the cross-country dispersion of equity returns.
First, to make the financial sector safer by strengthening the regulatory and supervisory framework – what has been termed “risk reduction”. And second, to deepen risk-sharing by creating the institutional conditions for more robust financial integration, which has been one key aim of the banking union.