ECB: Eurozone financial integration stalled in 2016

The European Central Bank (ECB) released a latest press statement on the bank’s annual report on Financial Integration in Europe.

Key highlights:

Mixed developments underline importance of ambitious capital markets union and completion of the banking union

New quality indicator shows limited private cross-country risk-sharing

Development of more pan-European banks could help financial integration and foster risk-sharing via retail credit markets

"Overall financial integration in the euro area stalled last year, the European Central Bank's (ECB) annual report on Financial Integration in Europe shows. The report was published today at a joint conference with the European Commission in Brussels. After some years of reintegration of financial markets in the aftermath of the financial crisis an aggregate price-based measure of integration was volatile in 2016 and an aggregate quantity-based measure flattened out.

These developments were the result of counterbalancing effects within and across different markets, partly influenced by different economic outlooks across countries, fluctuating global risk aversion and political uncertainty. On the other hand, the ECB's monetary policy continued to support financial integration."