This in turn will contribute to a more efficient allocation of savings across Europe. The development and the integration of capital markets in Europe have been fostered for some time now by financial liberalisation, globalisation and technological innovation. The introduction of the euro is giving this trend a significant boost in Europe.
Low profitability of financial institutions Let me now turn to the other risk: the contraction risk. What should we do if this risk becomes apparent? More specifically, what should we make of the low profitability of financial institutions from a macroprudential perspective? This question seems to be attracting more and more attention in Europe as well.