Given this, and with many emerging countries having mixed feelings about many aspects of free financial markets anyway, it is conceivable that the current trend towards more assertive and intrusive financial regulation – which is occurring for very understandable reasons – will end up going much further than contemplated at present. The potential for an outcome that eventually involves significant inflation is also obvious.
We also need more ambitious policies aimed at increasing the supply of private equity, and especially of early-stage venture capital.15 The development of fintech has the potential to expand access to credit and other financial services, in particular for small businesses.16 More broadly, to ensure an attractive investment environment in the euro area we should seek to complete the banking union, ensure adherence to fiscal rules and fully implement structural reforms.