Financial Market Integration in a Monetary Union

Claudia Buch

No 1062, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

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.

Keywords: monetary union; capital mobility; financial structures; transmission channels; commercial banking (search for similar items in EconPapers)
JEL-codes: F36 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1062

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