7  BIS Review 81/2000  bank balance sheets together with the increase in off-balance sheet activities is an ongoing trend.50 Mutual recognition clauses owing to the Single European Market, favourable financial market legislation, technological progress, as well as the institutionalisation of savings clearly supported the integrating role of the euro.
Summing up, currency union has contributed to the increasing competition in the domestic banking sectors but leaves scope for future activities to achieve a truly pan-European consolidation of financial intermediaries. IV. Implications for monetary policy  Two trends can be observed within the European financial system, despite all remaining national differences concerning legislation, taxation and the financial structure of enterprises.