Vítor Constâncio: Why EMU requires more financial integration Keynote speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the joint conference of the European Commission and European Central Bank, Frankfurt am Main, 3 May 2018. * * * I am pleased to host you today in Frankfurt at the Financial Integration Conference. The 2018 Financial Integration Report is the last issue published under my tenure as ECB Vice-President. I wish therefore to take this opportunity to reflect on the relevance of financial integration to Economic and Monetary Union (EMU) and provide some suggestions for future directions. Already at the very early stages of the project, it was clear that financial integration was needed to make the Monetary Union sustainable. The 1970 Werner Report mentioned the complete liberalisation of capital transactions and the full integration of financial markets as one of three necessary conditions for a monetary union. Along with this, it was understood that the single currency would secure the full benefits of a single market for capital. During the run-up to the Maastricht Treaty and in the context of the Delors report discussions it became clear that the dictum “one money one market” also implied addressing possible new concerns about financial stability in Economic and Monetary Union. In some cases this translated into prescient calls – like that from Alexandre Lamfalussy – for assigning the European Central Bank a role in banking supervision. Eventually however the institutional set-up of Monetary Union left financial stability considerations largely unaddressed.

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