Restructuring financial regulation in the European Monetary Union

This article argues that present financial regulatory arrangements within the European Monetary Union are not adequate either to preserve stability or to foster financial integration. Reform of financial regulation should concentrate on . establishing clear procedures for crisis lending and management, with the European Central Bank at the center; . preparing the ground for more centralized supervisory arrangements in banking, insurance, and securities; and . establishing and consolidating an active domestic and European Union-wide competition policy that limits local market power and national champions that are too big to fail.