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The report finds that the impact of the financial crisis on the process of financial integration has not been homogenous. Sectors hit hardest by the crises were those that had experienced the highest degree of integration over the last decade. In many cases there has been a sharp reversal in the positive trend over the period 2007-2008. This is especially the case for unsecured money markets, government bond markets and equity markets.
Also, the financial crisis has pushed EU banks to shift their focus to domestic issues and markets and engage less in internationalisation. Government interventions - in the form of rescue acquisitions - significantly re-shaped the process of consolidation, the report says.
On Clearing and Settlement issues the report concludes that competition and interoperability amongst CCPs has been boosted by the impact of the MIFID and the Code of Conduct. Also, within the area of settlement services, integration has advanced to increasing links amongst CSDs and cross-border consolidation.
Key issues addressed:
The financial crisis, and the first signs of recovery, is an inevitable point of departure for the 2009 edition of EFIR (European Financial Integration Report). Key issues that are being addressed in this report are:
· Can we expect EU financial integration to continue advancing once financial stability has been restored? (Chapter 2)
· How has the financial crisis impacted on EU financial sector profitability and efficiency? What is the expected impact over the medium term? How does
· Has the EU financial sector started to recover from the crisis? How have the strong cross-border ties in the EU banking sector impacted on financial stability in home and host countries respectively? (Chapter 4).
The European Union is also one of the major global financial players. Financial services policy needs to find the best ways to strengthen competitiveness and to fully reap the benefits of globalisation. The objective is also to strengthen the financial system so it is more able to withstand future financial shocks. Some of the key questions that EFIR also addresses are:
· What is the relative performance of the EU financial sector when looked at from a global perspective? What are the broad financial trends likely to shape the future of the financial sector? (Chapter 5)
· How has globalisation and EU financial integration impacted on financial stability?
· How has the work to build a stronger financial system progressed, at EU and international level? (Chapter 6)