Deepening financial integration to support Europe’s prosperity

Luis de Guindos, Vice-President of the European Central Bank, delivered a keynote speech at the joint conference of the European Commission and the European Central Bank on European financial integration.

He emphasized that financial integration is essential for Europe’s economic resilience and future growth, especially amid geopolitical fragmentation, technological change, and economic uncertainty.

De Guindos highlighted recent progress in financial integration, including reduced asset price dispersion and increased cross-border debt activity within the euro area. However, he noted that cross-border financing remains low, with only 14% of corporate lending being cross-border and declining equity market integration since 2022. Foreign direct investment has also fallen to a historical low, indicating structural barriers still hinder capital flows.

The speech outlined future policy initiatives, including the market integration and supervision package, which aims to establish a single rulebook, support digital innovation through tokenization, and create a more European supervisory framework. These measures are intended to deepen integration, boost competitiveness, and enhance resilience.

De Guindos stressed the importance of completing the banking union, finalizing a European deposit insurance scheme (EDIS), and enabling free movement of capital and liquidity within banking groups to support a unified and resilient financial system.

He also called for harmonization of regulatory and non-prudential rules across Member States to reduce fragmentation, improve stability, and position Europe as a global financial center. The speech concluded with a call for policymakers and market participants to collaborate in building a resilient, integrated, and competitive financial ecosystem to support sustainable growth.

For more details, visit the official ECB press release: ECB press release.