European Financial Integration and Equity Returns: A Theory-Based Assessment

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European Financial Integration and Equity Returns: A Theory-Based Assessment

Author Info

Kpate ADJAOUTÉ (HSBC Republic Bank (Suisse) SA & FAME)
Jean-Pierre DANTHINE (HEC-University of Lausanne, CEPR & FAME)

Additional information is available for the following registered author(s):

Jean-Pierre Danthine

Abstract

This paper reassesses, at the light of economic and financial theory, the well-documented recent evolution of the euro area public debt and equity markets. Doing so leads to associating the EMU and the single market with the changes in fundamentals and financial integration with convergence in pricing. For the public debt market, we stress the observation, conform with predictions, that risk free interest rates are now less volatile in the euro area. But also the fact that the establishment of a single public debt market is still not completed. The current fragmentation is costly to Treasuries and taxpayers and understanding its cause is important to evaluate the prospects of currently considered measures of financial integration.

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Paper provided by International Center for Financial Asset Management and Engineering in its series FAME Research Paper Series with number rp84.

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Date of creation: Jan 2003
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Handle: RePEc:fam:rpseri:rp84

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Find related papers by JEL classification:
F2 - International Economics - - International Factor Movements and International Business
F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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Babecký, Jan & Komárek, Luboš & Komárková, Zlatuše, 2008. "Financial Integration of Stock Markets among New EU Member States and the Euro Area," The Warwick Economics Research Paper Series (TWERPS) 849, University of Warwick, Department of Economics. [Downloadable!]
Other versions:
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Other versions:
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Other versions:
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Other versions:
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Other versions:
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Richard Podpiera & Tomas Dvorak, 2005. "European Union Enlargement and Equity Markets in Accession Countries," IMF Working Papers 05/182, International Monetary Fund. [Downloadable!]
Other versions:
- Tomas Dvorak & Richard Podpiera, 2005. "European Union enlargement and equity markets in accession countries," Working Paper Series 552, European Central Bank. [Downloadable!]
- Dvorak, Tomas & Podpiera, Richard, 2006. "European Union enlargement and equity markets in accession countries," Emerging Markets Review, Elsevier, vol. 7(2), pages 129-146, June. [Downloadable!] (restricted)
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