The tight limits on budget deficits imposed by the stability pact among the countries participating in the Economic and Monetary Union will accelerate recourse to private pension arrangements, giving additional impetus to the growth of institutional investors in Italy, France and Germany. The liberalization of capital movements at the end of the 1980s was an equally important propulsive factor.
New opportunities to diversify financial investments were opened up to savers in countries that had previously imposed foreign exchange restrictions. It became possible to construct portfolios with the desired combination of risk and return; at the same time, it became more difficult to manage portfolios, increasing the importance of the services offered by specialized intermediaries.