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After the improvement observed in 2009 in many market segments and despite continuous equity market integration in 2010, the financial environment with the worsening fiscal situation in some euro area countries posed challenges for European financial integration, the European Central Banks Financial Integration report published today concluded.
The main policy-relevant messages of the report can be summarised as follows:
- Euro area capital markets continued to increase in size in recent years, and cross-country differences in size declined.
- The worsening of the fiscal situation in some countries posed serious challenges to financial integration in 2010. The money and bond markets were particularly affected.
- The sharp divergence...
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