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A Financial Union for the Euro Area

Author(s): Poul M Thomsen

Date published: Oct 2018

As the European policy machinery kicks into action again after the summer break, I welcome this opportunity to share some thoughts.

The question put to me is how much more deepening of the economic and monetary union is needed. This is a big one. There is no simple answer. My approach today will be to focus on the core issue of private risk-sharing. I want to discuss what it really means, what holds it back—and what concrete steps can and should be taken to push it into a higher gear. Recognizing that every roadmap needs a destination, I want to lay out a vision for a true financial sector union for the euro area.

It follows that I shall discuss the banking union and the capital markets union. But I will also try to advance the debate one step further by discussing a truly integrated financial markets union—a union that can be more than the sum of its parts.

I will focus on finance today because—as I will explain—I see this as an area where meaningful progress is within reach—where progress can be made by taking small steps now. Much of this work, I believe, can be done within the confines of the current political consensus—we are not talking about Treaty change. We are talking about letting the technical experts hammer out mutually acceptable compromises. I will return to this.

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SUERF Policy Note, Issue 44 SUERF Policy Note, Issue 44

A Financial Union for the Euro AreaWeb version: A Financial Union for the Euro Area

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