Gertrude Tumpel-Gugerell: Financial integration and stability – efficiency gains vs pitfalls Keynote address by Ms Gertrude Tumpel-Gugerell, Member of the Executive Board of the European Central Bank, at the conference “Heterogeneous Nations and Globalized Financial Markets: New Challenges for Central Banks”, organised by the National Bank of Poland, Warsaw, 11 June 2010. *  *  *  Ladies and Gentlemen 1 , It is a pleasure for me to speak at this conference today here in Warsaw. Heterogeneous nations and globalized financial markets – the title of this conference – are an old phenomenon. In fact, in the late medieval ages of the 14th to the 16th century, the Kingdom of Poland, the Holy Roman Empire and the Hanseatic area have formed a well financially integrated area contributing to more specialization in trade and hence to economic growth at that time. In fact, despite the existence of many currencies, money was easy to transport and so financial integration was rather more advanced than the integration of markets for goods. The Kingdom of Poland was playing a particular role for the financial integration at that time as a key provider of silver from its silver mines for the coin production, also for the neighbouring regions. 2 In today’s modern economies, we think of financial integration having mainly two positive impacts. First, to improve the allocative efficiency of capital, and second, to help the diversification of risks.

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