Restructuring financial regulation in the European Monetary Union

This article argues that present financial regulatory arrangements within t he European Monetary Union are not adequate either to preserve stability or to foster financial integration. Reform of financial regulation should con centrate 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 ban king, insurance, and securities; and . establishing and consolidating an active domestic and European Union-wide competition policy that limits local market power and national champions t hat are too big to fail.