How Integrated are the European Retail Financial Markets? A Cointegration Analysis

31 Pages Posted: 10 May 2002

See all articles by Martin Schüler

Martin Schüler

Centre for European Economic Research (ZEW)

Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research; University of Heidelberg - Alfred Weber Institute for Economics

Date Written: January 2002

Abstract

With the introduction of the Euro, a single European money market has emerged. Further wholesale financial markets are considered to be highly integrated within the European Union. However, integration in retail financial markets is less advanced. For measuring financial market integration this distinction between wholesale and retail markets becomes crucial. There is a wide literature relating to integration of wholesale financial markets but just a few studies that try to measure integration in European retail markets. This paper, in a first step, gives a systematisation of the literature on measuring financial market integration with a focus on the distinction between wholesale and retail financial markets. In a second step, bivariate and multivariate cointegration techniques are used to assess the degree of integration in four loans and two deposit markets in the European Union. Finally, based on this analysis obstacles to financial market integration are discussed.

Keywords: Financial Market Integration, Cointegration, European Union

JEL Classification: F36, G15

Suggested Citation

Schüler, Martin and Heinemann, Friedrich, How Integrated are the European Retail Financial Markets? A Cointegration Analysis (January 2002). ZEW Discussion Paper No. 02-22, Available at SSRN: https://ssrn.com/abstract=309104 or http://dx.doi.org/10.2139/ssrn.309104

Martin Schüler (Contact Author)

Centre for European Economic Research (ZEW) ( email )

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Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
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D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.zew.de

University of Heidelberg - Alfred Weber Institute for Economics ( email )

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Heidelberg, D-69117
Germany

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