First, I take a brief look at the European financial sector and especially the banking sector before the crisis. Then I discuss the main building blocks of reforms to European financial system. Finally, I provide views on the next steps: future developments in the financial sector and necessary policy actions.
The European financial sector before the crisis The banking sector has traditionally been and still is the dominant component in the European financial sector, and developments in banking have also been of clear relevance to the emergence of the financial crises in Europe.