Changes in the extent of financial integration within the European Community between the 1970s and 1980s

This study investigates the co-variability of changes in nominal interest rates for the main EC countries between April 1974 and January 1992, using principal components analysis. We find that there is evidence of increased monetary interdependence and greater capital market integration, but this is not a universal or even experience across all countries. EC capital markets also seem to have become more highly integrated than the money markets.