In a keynote speech published by the European Central Bank, Vice-President Luis de Guindos said euro area financial integration has moved above the average level seen since the creation of Economic and Monetary Union, but argued that important parts of the financial system remain insufficiently integrated and need further EU reform. He cited fourth quarter 2025 data showing cross-border corporate lending within the euro area at 14% of total corporate lending, alongside declining equity market integration since 2022 and historically low intra-euro-area foreign direct investment. The speech identified the market integration and supervision package as the main near-term route to deeper capital markets integration, highlighting a single rulebook through more directly applicable regulations, changes to the distributed ledger technology pilot regime to support tokenised finance, and stronger EU-level supervision. On banking, de Guindos called for the banking union to be treated as a single European jurisdiction, for a fully fledged European deposit insurance scheme, and for capital and liquidity to move more freely within cross-border banking groups. He also referred to Governing Council recommendations endorsed in December 2025 to simplify banks' regulatory, supervisory and reporting frameworks, and argued for a complementary macroprudential approach for non-bank financial institutions as well as for reducing non-prudential barriers such as differences in insolvency, tax and corporate law.
European Central Bank 2026-05-07
European Central Bank Vice-President urges swift capital markets package and banking union reforms to deepen financial integration
European Central Bank Vice-President Luis de Guindos said euro area financial integration is now above its long-term average but still insufficient, citing low cross-border corporate lending, declining equity market integration and historically weak intra-euro-area foreign direct investment. He highlighted the market integration and supervision package—covering a single rulebook, changes to the DLT pilot regime and stronger EU-level supervision—as the main near-term lever for deeper capital markets integration. He also urged completion of the banking union with a European deposit insurance scheme, freer intra-group capital and liquidity flows, a macroprudential framework for non-banks, and removal of non-prudential barriers such as divergent insolvency, tax and corporate laws.