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The euro and financial markets
- Why are the bond and equity markets in Eurozone less integrated than the money market?
- How has the sovereign debt crisis led to a reversal of financial integration in the Eurozone?
- The sovereign debt crisis has also led to a build up of Target-2 imbalances. Why has this happened?
- Why have these Target-2 balances declined again after 2012?
- Why have they increases again since 2015?
- Is the insurance against asymmetric shocks provided by integrated financial markets a perfect substitute for the insurance provided by an integrated government budget?
- Explain why the dollar became the most prominent world currency despite the fact that it has sometimes been subjected to large depreciations.
- Explain why the continuing segmentation of the banking systems in Europe reduces the potential for insurance against asymmetric shocks.
- Is the financial crisis going to speed up (or slow down) the process for the euro to become a major international currency?
- Why is it that budgetary union is necessary to maintain an integrated banking system in the Eurozone?