Cross-border and cross-sectoral financial integration within the EU is fostered by competition, freedom of establishment and the free flow of capital. The extent of integration within the EU’s financial sector is a substantial achievement and it should be safeguarded in the aftermath of the crisis.
About 40% of foreign claims by UK banks are in the euro area, and roughly the same share can be observed in the opposite direction. 1 Therefore, we Europeans have all the reasons to create a framework for macro-prudential oversight at the level of the single market of the 27 member countries of the European Union.