Mullineux, Andy; Murinde, Victor --- "Financial sector convergence in Europe" [2003] ELECD 26; in Tumpel-Gugerell, Gertrude; Mooslechner, Peter (eds), "Economic Convergence and Divergence in Europe" (Edward Elgar Publishing, 2003)

Book Title: Economic Convergence and Divergence in Europe

Editor(s): Tumpel-Gugerell, Gertrude; Mooslechner, Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843762416

Section: Chapter 20

Section Title: Financial sector convergence in Europe

Author(s): Mullineux, Andy; Murinde, Victor

Number of pages: 22

Extract:

20. Financial sector convergence in
Europe
Andy Mullineux and Victor Murinde

20.1. INTRODUCTION

Any attempt to assess the convergence of the financial sectors of `accession
countries' on the EU financial sector faces an immediate fundamental
difficulty. This is because the ultimate shape of the EU financial sector is
itself unknown. The single market in financial services is far from complete,
since numerous tax and regulatory impediments remain. Further, the full
impact of the introduction of the euro in January 1999 has yet to be seen
and will of course be greater when (eventually) the UK, and hence `The
City' is integrated into a single European financial space. The initial impact
of the euro was to induce more rapid growth of the corporate bond markets.
Other drivers of change include pension privatization. The progressive
replacement of `pay as you go' pension schemes with funded schemes will
accelerate the development of capital markets in Europe by creating a long-
term demand for capital market instruments (bonds and equities).
Thus, in assessing convergence, we face a moving target when answering
the question `convergence on what?'. Financial sector restructuring in the
EU member states is progressing at varying paces from historical structures
that differ considerably. It is indeed possible that some of the accession
countries will prove to be the `tortoises' that arrive at the ultimate structure
ahead of some, perhaps even all, of the current member state `hares', whose
progress is in fits and starts and who often focus the opposition of ...