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Financial Market Integration in a Monetary Union

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  • Buch, Claudia M.

Abstract

Financial markets in Euroland differ from those of a national monetary union in two regards. First, capital markets in general and banking markets in particular show a greater degree of segmentation than national financial markets as a result of information costs and regulatory barriers to full integration. Second, financial market structures differ among the members of Euroland, which potentially affects the transmission of (monetary) shocks. This paper provides a simple model of a currency union which takes these peculiarities into account, focusing on the interaction of financial structures, the degree of capital mobility, the transmission of shocks, and the portfolio choices of banks.

Suggested Citation

  • Buch, Claudia M., 2001. "Financial Market Integration in a Monetary Union," Kiel Working Papers 1062, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1062
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    File URL: https://www.econstor.eu/bitstream/10419/17897/1/kap1062.pdf
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    References listed on IDEAS

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    Cited by:

    1. Theresia Theurl, 2003. "Institutionelle Hintergründe der Finanzmarktintegration: Handlungsbedarf im Zuge der EU-Osterweiterung," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(4), pages 510-521.

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    More about this item

    Keywords

    monetary union; capital mobility; financial structures; transmission channels; commercial banking;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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