The European integration process has suffered some political setbacks this year, notably the rejection of the constitutional treaty. In the coming years, market integration is likely to be fostered not so much by politicians, but by the market participants themselves. That will be first and foremost the case in the realm of financial integration: following the integration push resulting from the political treble whammy of euro launch, FSAP and Lamfalussy-process the next steps towards a unified European financial market will be characterized by cross-border consolidation of banking markets.

Finanzplatz Deutschland has emerged from a torrid few years – and now faces major challenges in the shape of intensifying competition in Europe. However, the melding of credit and capital markets opens up tremendous opportunities for Germany’s bank-based financial system.