of economic integration. with the introduction of the euro and the conduct of a single monetary policy by the ecb, with the emergence of an increasingly integrated financial market and a single euro exchange rate, the notion of an " eu economy " has gained real substance. as a consequence, the eu has come to be recognised in the world as an entity in its own right. further efforts to develop a " single voice " for europe in international economic and financial affairs are set to reinforce this perception. with regard to deeper political integration, i believe that the eu demonstrated in nice that it is ready to gradually move towards strengthening the truly european element of decision - making by introducing more qualified majority voting - even though many people expected, and hoped for, greater progress on this issue. seen from the perspective of independent central bankers - with their necessary distance from politics - it appears that the main accomplishment of the nice summit was not necessarily the conclusion of the intergovernmental conference on institutional reform. rather, the summit's main success lies in what it set in motion : the launch of a thorough and comprehensive discussion about " who does what " at the european, national and regional levels of government. the results of nice will prepare the european union for the arrival of new members. notwithstanding certain flaws and shortcomings in the legal details, the greater europe will have its institutional framework. the focus of attention will now shift again to the candidate countries'preparations for eu membership. while a certain impatience on the part of the candidate countries with regard to eu accession, and even a speedy entry into the euro area, is understandable, the full impact of eu membership should be realistically assessed, in particular the consequences of the often intense competition within the single market. all candidate countries currently negotiating eu accession are committed to eventually adopting the euro ; there will be no " opt - outs ". provided that the future new member states demonstrate their ability to fulfil the maastricht criteria in a sustainable manner, they will, in time, replace their currencies with the euro. as i explained in our previous exchange of views, the euro will thus indeed contribute to healing the economic divisions in europe. at the same time, it is clear to me - and i imagine you would agree - that this will be a gradual process and a long - term rather than a short - term prospect. nevertheless, in order to ensure that the prospective expansions of the euro area run smoothly, the ecb, and the national

sabine lautenschlager : interview with the financial times interview by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, with the financial times, conducted by ms claire jones and ms caroline binham and published on 4 july 2017. * * * if i may, if we just start with the big topic of brexit, you ’ ve given a few speeches in the last few months just about what the single supervisory mechanism ’ s ( ssm ) expectations would be for uk institutions looking to establish a base in the eurozone, and you said you don ’ t really want to accept just a brass plate, that you would want something substantial here. could you elaborate a little bit more about what your expectations are for institutions that are looking to come? well, first of all, we do not want to have an empty shell in the euro area where booking is done, but not the risk management ; there ’ s the question of governance, the question of what kind of strategy does the bank have for the euro area entity : is it fully somewhere else where we do not have the contact, where we cannot supervise correctly? so, it is a question of the balance between what kind of risk profile a bank with a licence in the euro area has, what kind of risk exposure, what kind of risk management and what kind of decision - making has to take place in the euro area. our supervisory expectations are that we do not expect the banks not to do some back - to - back booking ; it ’ s not, from our point of view, forbidden. but the euro entity should not be an empty shell where the credit risk stays in the euro area, and all of the market risks are booked and governed and managed outside of the euro area. is the expectation that an institution would actually set up a subsidiary or would some other kind of less onerous requirement, particularly when it comes to capital and liquidity, be okay for you? well, that depends on the legal environment we must have, and, as you know, there ’ s a discussion ongoing at the level of the european commission concerning intermediate parent undertakings. that does not mean that third - country branches would not be allowed, but it depends a on what kind of business there is, and what kind of structure the banks want to have too. it ’ s not always the supervisor saying ‘ i want you to have