European Financial integration Report 2007
Financial markets are of great significance to the EU economy, as they play a critical role in mobilising savings and in allocating them to investment. Financial intermediation itself contributes to GDP growth....
TABLE OF CONTENT 1. INTRODUCTION........................................................................................................5 2. FINANCIAL INTEGRATION ....................................................................................8 2.1. Financial markets: equity, bond and money markets................................................... 8 2.2. Financial institutions; banking and insurance ............................................................ 10 2.3. Financial infrastructure ..............................................................................................12 2.4. Retail markets............................................................................................................. 13 2.5. Conclusions ................................................................................................................ 17 3. MARKET STRUCTURES AND COMPETITION................................................... 18 3.1. Main developments in market structures ................................................................... 18 3.2. Which type of consolidation: along national boundaries or across borders? ............. 20 3.3. Impact of financial integration on concentration and competition ............................ 24 3.4. Distribution channels..................................................................................................27 3.5. Conclusion.................................................................................................................. 29 4. EFFICIENCY AND INNOVATION......................................................................... 30 4.1. Recent financial sector efficiency trends ................................................................... 30 4.2. Efficiency potential in the integration process........................................................... 31 4.3. Creating a world class financial sector - EU global competitiveness........................ 33 4.4. Financial innovation - through new products and scope ........................................... 35 4.5. Conclusions ................................................................................................................ 36 5. FINANCIAL STABILITY.........................................................................................37 5.1. The impact of financial integration on financial stability .......................................... 37 5.2. The growth of pan-European financial groups........................................................... 37 5.3. The internationalization of capital markets................................................................ 38 5.4. The enlargement and some financial stability issues ................................................. 39 5.5. Conclusions ................................................................................................................ 40 6. CONCLUSIONS........................................................................................................42 ANNEX I: Policy achievements in 2007.................................................................................. 44 ANNEX II: Financial Integration Indicators............................................................................ 49 ABBREVIATIONS.................................................................................................................. 76 REFERENCES........................................................................................................................ 77
