The completion of SEPA will not only have direct benefits for the consumer, but will also further promote integration in retail banking. More generally, the further and faster integration of clearing and settlement systems in Europe is an essential motive behind the ECB’s initiative to offer in the future securities settlement services in central bank money in euro – the so-called TARGET2Securities system.
However, recent experience suggests that central banks should not be too complacent, even when expectations appear to be anchored, as the private sector might not always be a good predictor of future developments. Over the previous cycle, inflation expectations seemed to be well anchored, but partially concealed the build-up of asset market instability and longer-run threats to price stability.