They would overcome a shortcoming of the initial design of the monetary union that allowed financial supervision to lag behind monetary and financial integration. Their implementation will also contribute to address the current crisis by helping to separate banks from the sovereigns and reverse the on-going fragmentation of markets along national borders.
Potential effects on interest rates  My third topic concerns the potential effects on interest rates: How will interest rates be affected by the SGP reform in the long run? And what is the markets’ assessment? Identifying the impact of fiscal policies on interest rates is a complex task and research conducted in this area in recent years has not resulted in unambiguous conclusions.