ECB Says European Financial Integration Dealt Setback by Crisis

The European Central Bank said the sovereign debt crisis has caused a “marked deterioration” in financial integration in the euro area and urged governments to strengthen policy frameworks.

“During 2011, the intensification of the sovereign bond crisis strongly affected the euro-area financial system” and “the integration of markets has deteriorated further,” the ECB said in its annual report on financial integration in Europe published in Frankfurt today. “The indicators of money-market integration presented in this report suggest that, at shorter maturities, the integration gains achieved in early 2011 were reversed.”