The euro and capital market integration: are we there yet?

Assesses the effect of the introduction of the euro on capital markets, noting “explosive growth” in the corporate bond market and a rising demand for junk bonds. Believes that equities are funamentally strong, although foreign investors have suffered from falling euro values, and sees some signs that investors within the eurozone are diversifying away from their home markets. Gives statistics on the growth in derivatives trading, splitting it by types of contract; and considers why the consolidation of stock and futures exchanges has been slower than expected. Discusses the implications of capital m arket unification for investment allocation and expects an increasing emphasis on sector analysis as national stock indices coverage; but points out that country factors, e.g. fiscal reforms, still remain.