Financial integration and financial development are distinct, but interrelated concepts. Therefore, in designing the necessary institutional and regulatory frameworks we need to make sure that financial integration and financial development reinforce each other, thus improving the performance of the financial system. This is why EU legislators have an important role to play.
The result was a vast literature on central bank credibility, independence, transparency and price stability mandate. At the beginning of the new millennium, the development of monetary economics reached its culmination. The main challenges of monetary policy were thought to be, by and large, solved. We know now that this was not so.