Choices made during the 1930s have shaped financial systems to this day. Likewise, we will live for a long time with the consequences of choices made during the current crisis. At stake is not only the quality and safety of financial intermediation but also the future of Europe’s 52-year quest for a single financial market. While its rationale remains compelling, this aspiration is under threat as the crisis has pushed national authorities to reassert control over their financial systems.

Whether this setback is temporary depends critically on the outcome of the debate on Europe’s cross-border financial stability arrangements. On June 19, the European Council will consider an ambitious overhaul of these arrangements, based on the recommendations of the De Larosière report. As proposed by the European Commission, this overhaul would constitute a historic breakthrough towards greater market integration and stability. In our view, it deserves strong support.