ABSTRACT
A considerable amount has been written about the impact of EMU on European financial markets. A broad consensus has emerged from this work about the impact. The main conclusions may be summarized as follows:
Government bond markets will be more closely integrated and yields closely correlated.
Non-government borrowers will increasingly borrow directly from investors by issuing debt securities rather than borrowing from banks, leading to a US-style corporate bond market.
The national bias in equity and fixed income investments will diminish and funds will be increasingly managed against Euro-wide benchmarks, possibly involving some reallocation of existing investments.
Equity markets will grow, as more companies go public and more investors seek to invest funds in equity markets.
