Impact of eu monetary integration on international financial market

下面为大家整理一篇优秀的paper代写范文- Impact of eu monetary integration on international financial market，供大家参考学习，这篇论文讨论了欧盟货币一体化对国际金融市场的影响。随着欧洲经济和货币一体化的日益深化和发展，它不仅改变了欧洲金融市场的格局，也改变了整个世界国际金融市场的竞争和发展的格局。欧盟货币一体化不仅降低了金融市场交易和管理成本，还降低全球性跨国公司及金融机构投融资的风险，增加了融资的便利。

With the deepening and development of European economic and monetary integration, it has not only changed the pattern of European financial market, but also changed the pattern of international financial market competition and development throughout the world. From the beginning of the European monetary integration -- the coal and steel joint venture and the treaty of Rome -- to the continuous eastward expansion of the European Union, the euro and European financial market have a growing influence on the international financial market.

The optimal currency area refers to the region that adopts the single currency or several currencies, the exchange rate is fixed permanently and the external unified floating. "Optimal" is defined from the perspective of macroeconomic objective -- maintaining the internal and external balance of the economy. Internal equilibrium is achieved at the optimal point of replacement for inflation and unemployment. External balance refers to the balance of international payments, that is, the continuation of balance of payments positions. Monetary integration refers to the optimal currency area adopting a single currency, circulating a single currency within the region, establishing a unified central bank for supranational implementation of monetary policy functions. Therefore, the optimal currency area theory is the basis and core of the single currency theory.

The concept of "optimal currency area" was first proposed by Robert mondale, an American economist who was a research fellow in the special research department of the international monetary fund at that time. Later, inglem, McKinnon and others jointly created the research field of optimal currency area. In the 1970s, the study of the optimal currency area attracted more international economists, among which the most prominent ones were grubel, corden, isiamar, thor and willett. They focused on the costs and benefits of joining the optimal currency area. With the development of the economic and trade union of Europe, economists mainly investigated whether the European Union meets the conditions of the optimal currency area and the way and mode of monetary union. Up to now, the optimal currency area theory is still the core of monetary integration theory.

Conditions for optimal currency area: price and wage flexibility; Integration of factor markets; Financial market integration; Highly integrated commodity markets; Macroeconomic coordination and political integration.

The most common is to analyze the monetary union by using the criteria of the optimal currency area proposed by mondale, McKinnon, etc. The main content of the analysis includes the correlation between the economic growth rate, inflation rate, unemployment rate and the change of the real exchange rate level of each country. If the analysis shows that the correlation of these economic indicators above these countries is low, it is generally believed that these countries are vulnerable to asymmetric impact, and thus are not suitable to form the currency area. In theory, however, there is no rigorous standard for correlation, which is usually based on the U.S. or Canada. The eichengreen study, for example, found that real exchange rates in eu countries varied more than in major us states. Nominal wage rigidity is stronger than in America. The flow of labor within the United States is lower than between states.

Most studies have shown that the euro zone in general is not an optimal currency area, from the trade structure similarity, the degree of industry inner trade, real GDP and unemployment growth of six main indexes such as the relevance of the comparison results, only in Germany, France, Belgium, the Netherlands, Denmark five core countries in line with the standard of the optimum currency area, in every country in the rest of the has a gap in different aspects.

The results of these studies is valuable, but the traditional research method has certain limitations, so future generations for the analysis of the actual costs and benefits obtained in accordance with the commission's point of view, namely while is a certain distance from the optimum currency area criteria themselves, but not the eu to give up the cost of the floating exchange rate is too high, the possibility of asymmetric impact is small, and the euro after launch, trade, investment will be further expanded, the free flow of elements will be more apparent, asymmetric shock will be reduced further, and after considering the implementation of the single currency, highly unified monetary policy, fiscal policy is restrained, Disturbance from the policy side will be greatly reduced.

Generally speaking, with the gradual expansion of the size of the eurozone, it has become the world's first financial market. By the end of 1995 alone, the market value of bonds, equities and bank assets issued by the European Union countries was more than $270,000 billion, while the market value of U.S. assets was $230.3 billion. The euro is an innovation in financial system. The effect of financial system is the change of financial market structure, which is reflected in the money market in the short term. In the longer term, the stock, bond and derivative financial markets will gradually end the past state of division and move towards unification.

The overall impact of eu monetary integration on the international financial market is reflected in the direct reduction of transaction and management costs in the financial market, and the annual transaction and management costs saved by the launch of euro for member countries are more than 60 billion euros, equivalent to more than 1% of the total regional GDP. Reduce the risk of investment and financing of global transnational corporations and financial institutions, and increase financing convenience. The status of the international financial center will change relatively, and the financial center in the euro area will gradually occupy an important position in the international financial center. International financial regulation and monetary policy, foreign exchange policy cooperation and coordination will be strengthened.

After January 1, 1999, the European central bank implemented the unified monetary policy in the euro zone, which means that the countries in the euro zone will use the unified currency and adopt the unified short-term interest rate, which will undoubtedly have a huge impact on the international monetary market.

The unification of the euro area's money markets has led to a rapid expansion in market capacity and a rise in trading volumes, which has greatly increased market liquidity. Unlike capital markets, money market instruments have shorter durations, so there is little difference in yields due to differences in credit risk between countries and more opportunities for cross-border capital flows. In addition, the expansion of the euro area's money market capacity and good liquidity will also attract the inflow of foreign capital, gradually forming a new ternary pattern to compete with the dollar currency market and the yen currency market.

The launch of the euro should give a clear boost to market consolidation. The European central bank (ECB) President, mark duisenberg, thinks that the integration of money markets has been remarkable since the euro zone was born, as rising cross-border business in the unsecured lending market and the bond repurchase market has accounted for more than 50 per cent of its total. The euro area's money markets are marked by TARGET. Both interbank market operations and operations between commercial Banks and the ECB can be carried out through TARGET, especially for credit agencies to conduct monetary-policy operations related payments must be settled by TARGET. It provides reliable technical support for the flow of transnational capital and helps to improve the degree of integration of monetary market. In 2004, there were 267,000 bank to bank transfers within the euro area through the TARGET payment and settlement system. The average daily transaction value was 174.1 billion euros, exceeding the daily average from 2001 to 2003. The three-month interbank offered rate in 2004 remained unchanged at 2.11 percent in each month. Compared with the U.S. interbank offered rate in the same period, the interbank offered rate in the euro zone showed a more moderate change. This plays an important role in promoting steady economic development.

The most immediate effect of the euro launch has been to fuse the bond markets. Since 1999, the government bonds of various countries have been converted into euro bonds one after another. In terms of market size, the outstanding debt of the government bond market reached 2.2 trillion euros at the end of 1999, surpassing the Japanese government bond market and becoming the second largest government bond market in the world, second only to the us Treasury bond market.

However, the euro will not only bring about the expansion of the market size, but also bring about a series of changes in the breadth, depth and liquidity of the market. The more uniform the market, the more credit risk will become the focus of investors consider factors. Before the launch of the euro, investors in European markets paid more attention to the selection of national assets and the diversification of risks, which impeded investors' pursuit of high-yield bonds, thus hindering the growth of European high-yield bond market. Therefore, an inevitable effect of euro initiation is to drive the growth of high yields in European bond markets.

The euro bond market already has a very important position in the international bond market. In the work report issued by the European central bank, the euro has played an alternative role in the international securities market since its inception, and its investment role is becoming more and more prominent. In 2002, eurobonds accounted for 55.6 per cent of international bond issuance, while us bonds accounted for 31.8 per cent. Eurobonds already account for half the bond market. From the perspective of scale, the bond size of the eurozone in 2003 was 2.8 times that of the us, and it actually reached 31.7 times in the second quarter of 2004.

The introduction of euro will cause a revolutionary change in the derivatives products in Europe. Some derivatives will disappear, such as currency hedging transactions between different countries in the region in the past and currency swaps and so on. Due to the convergence of interest rates among the member countries in the region, trading such as option contracts that give interest rate differentials between countries is reduced. But start again at the same time the euro will create some new derivative financial products: due to the increase in international financial market demand for the euro currency, coupled with the formation of a single capital market, money market to strengthen the zone to attract international investors, international capital in the European market for the dollar, euro, yen and other major currencies between transfer increases, the corresponding increase demand for money transfer process related derivatives.

Another change in derivatives trading after the launch of the euro is the increase in various futures contracts denominated in the euro. Since 1999 new bond issues will be priced in euros, and various new bond futures contracts will be priced in euros instead.

The launch of the euro will also change the competitive landscape in the derivatives market. With the loss of their dominant products, smaller exchanges such as Amsterdam, Brussels, Vienna and Madrid will face the problem of survival by establishing links to the big exchanges and common settlement procedures that will allow them to compete. Competition will be fiercer among the three big exchanges, the London international financial futures exchange, the German futures exchange and the French international futures exchange.

In 2000, the establishment of the new Euronext stock exchange in the euro area became a typical example of breaking the restrictions of countries and currencies and stimulating the growth of business in the relevant securities and financial trading centers. In 2004, the trading values of ETFS of Europe's two major stock exchanges, Deutsche Borse and Euronext, were far higher than those of the New York stock exchange except for the three months of October, November and December, creating a new pattern of international financial derivatives market.

Equity markets are the euro zone's weakest link. Although the euro area now has the world's second-largest share market after the United States, the number of shares in each country is still small. The euro zone lacks a dominant market that can compete with big equity markets such as New York, Tokyo, London and Hong Kong and is compatible with the euro zone's international standing.

Measuring whether a country's stock market capitalization rate is developed important index, namely the ratio of stock market capitalization to GDP, before the collapse of the bubble economy, Japan's stock capitalization rate had been among the top of the global financial markets, but after the European monetary integration, the stock market is the most developed the United States, Britain, Switzerland, these countries capitalization rate were over 180%, the euro zone, the capitalization of the stock market is only 85%.

However, in the long run, the unified currency will bring unprecedented changes to the development of the stock market: with the euro as the link, there will be potential changes in the corporate system, tax and financial system, legal system and even social and cultural traditions, as well as investment psychology of the member states. The pass-through effect of the market will affect the development of the whole European stock market, and then change the power pattern of the world stock market, and enhance the attractiveness of the European stock market to both domestic and foreign investors and international listed companies.

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