Equity markets and EMU
Equity markets and EMU

Summary/Abstract: European Monetary Union has had an impact on the capital markets in Europe, both directly and indirectly. The question that this paper attempts to investigate is whether the financial integration can be translated into the convergence of the equity markets in Europe, and, if the European equity markets can rival, in size and liquidity, the equity markets in the most mature capital market in the world – that of the United States. Analyzing the methods of investigation of convergence of the markets we can conclude that European equity markets do have a potential to rival equity markets in the United States. However, degree of success will depend on the ability of the European markets to adopt the changes, especially those related to the institutional adjustments that can spur the integration of markets, mainly the increased investments by institutional investors such as pension funds, as well as the legal and fiscal adjustments that would increase the investor trust in the capital markets in Europe and incentives to invest.

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