The euro area financial system

Four years after the introduction of the euro, this paper provides an overview of the current structure and integration of the euro area financial systems and related policy initiatives. We first compare the euro area financial structure with that of the United States and Japan. Using new and comprehensive financial account data, we also describe how the euro area financial structure evolved since 1995. We document the progress towards integration of the major euro area financial segments, namely money markets, bond markets, equity markets and banking. Finally, we discuss recent policy initiatives aimed at further improving European financial integration.