This text addresses key questions facing European financial markets today. It relates to the dramatic increase in competition between financial centres and institutions under the influence of several factors - the effect of innovation in financial products and technological processes, widespread deregulation and associated re-regulation (prudential rules), the implementation of the single market in Europe and the new strategies of institutions and national financial centres facing more competitive conditions. Major subjects include the transfer of fragility from the real economy to the financial sector, and vice versa, through such channels as booming financial activities, intense competition and greater risks, as in property lending, and also the more cautious policies adopted by financial intermediaries in response to losses in the recent recession. The papers were contributed by members of universities, the private financial sector, national and international policy making communities, and presented at the 18th Colloquium of the Societe Universitaire Europeenne de Recherches Financieres, in Dublin, May 1994. They should be of central importance to policy makers, bankers, financial executives and academics.