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The Internationalization of Austria's Financial Sector since Accession to the European Union

  • Matthias Fuchs


    (Oesterreichische Nationalbank)

Registered author(s):

    Since the mid-1990s, Austria and many other industrialized countries have experienced massive growth in their external asset and liability positions. However, Austria's high degree of real economic integration due to its position as a small, open economy only partly explains this development. Autonomous financial transactions, effected independently of external trade financing from a profit motive, are increasingly determining cross-border movements of capital. Legal measures adopted in the run-up to Austria's accession to the EU (e.g. the full liberalization of the Austrian financial sector) favored this development, as did the country's participation in Economic and Monetary Union (EMU). In terms of the rate of internationalization, Austria has as high a degree of financial integration as Finland and Sweden. However, it lags well behind Switzerland or the Netherlands in this respect. In terms of GDP, foreign equity holdings are on a far smaller scale in Austria than in these countries. Austrian securities investors prefer foreign debt investments. The euro area is Austria's most important investment and financing region — especially for securities. In the 10-year observation period, Austria's net income from foreign investments is in line with the European average.

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    Article provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Monetary Policy & the Economy.

    Volume (Year): (2005)
    Issue (Month): 2 ()
    Pages: 130–143

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    Handle: RePEc:onb:oenbmp:y:2005:i:2:b:9
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    1. repec:cup:cbooks:9780521671798 is not listed on IDEAS
    2. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2004. "Financial Globalization and Exchange Rates," CEPR Discussion Papers 4745, C.E.P.R. Discussion Papers.
    3. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2003. "International Financial Integration," CEPR Discussion Papers 3769, C.E.P.R. Discussion Papers.
    4. Lieven Baele & Annalisa Ferrando & Peter Hördahl & Elizaveta Krylova & Cyril Monnet, 2004. "Measuring financial integration in the euro area," Occasional Paper Series 14, European Central Bank.
    5. Karen K. Lewis, 1999. "Trying to Explain Home Bias in Equities and Consumption," Journal of Economic Literature, American Economic Association, vol. 37(2), pages 571-608, June.
    6. repec:cup:cbooks:9780521633178 is not listed on IDEAS
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