Only with a deep, liquid market is it possible to launch IPOs of successful projects that can offset the losses with projects that fail. Harmonising insolvency rules across jurisdictions would be a major step towards supporting capital markets. This is critical for mobilising finance through capital markets, as it would create incentives and favourable conditions for institutional investors to overcome the home bias in their investment strategies. This is especially true for pension investment, as large private pension funds tend to be a complement to deep capital markets. We need to establish a harmonised regulatory environment for new types of finance, such as crowd funding. The emergence of increasingly complex financial products needs to be accompanied by adequate consumer protection of financial investment, in order to safeguard financial stability and ensure the protection of individual investors. The second component of a comprehensive approach entails policies that will stimulate entrepreneurship. High-tech entrepreneurial firms that aspire to go public should be supported and facilitated by stock exchanges specialising in IPOs for young innovative companies. A reduction in the wedge between corporate income taxes and personal income taxes has already been shown to have a strong positive effect on high-tech investment in a European context.21 Last but not least, the efficient application of R&D tax incentives and increased public funding of private research universities, whose labs often make key scientific and technological breakthroughs, are other important avenues for stimulating innovation and the commercialisation of science. Conclusion Let me conclude.

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.