The second challenge concerns another aspect of policy-making left to the authorities in the individual Member States: namely, of course, fiscal policies. A consequence of financial integration is that European banks are exposed to a wide range of risks in European government debt and not only to domestic sovereign risk.
These measures are aimed at speeding up the supply of high-standard financial laws and the integration with international practice so as to foster a highquality business environment for the financial industry. Fifth, capital account opening-up should be achieved at a high level.