Crises and their reflection on financial market integration

This article focuses on financial markets, and through it we will seek to briefly introduce the reader to the essence of the idea of financially integrated markets, and outline the possibilities for a general measurement of alignment. We will then try to assess the progress of financial alignment across markets over the quarter of a century of euro-area existence that we are commemorating this year. In this spirit, we will look at how similar the movements in the foreign exchange, money and equity markets of selected euro candidates have been to those in the euro area and, in the case of the government bond market, to those in Germany, in response to the ongoing turbulent events. Our goal is to show how events like the global crisis, the Covid-19 pandemic, the security crisis and the subsequent energy crisis have manifested themselves in the degree of (mis)alignment of individual parts of the financial market.