Can European Banks Survive a Unified Currency in a Nationally Segmented Capital Market?

Jerome Levy Working Paper No. 305

13 Pages Posted: 25 Oct 2000

See all articles by Jan A. Kregel

Jan A. Kregel

Bard College - The Levy Economics Institute

Date Written: July 2000

Abstract

The euro was expected to become a substitute for the U.S. dollar as an international currency. However, compromises made during its creation make it a less than perfect substitute in the medium term. Among these compromises was the application of macro convergence and micro diversity in financial markets and supervision at the national level. This now prevents the creation of a unified capital market and places EU banks at a disadvantage when competing with U.S. banks in global markets. There were also peculiarities in the integration process that led to a single currency in the United States that suggest further institutional changes will be necessary.

Suggested Citation

Kregel, Jan A., Can European Banks Survive a Unified Currency in a Nationally Segmented Capital Market? (July 2000). Jerome Levy Working Paper No. 305. Available at SSRN: https://ssrn.com/abstract=240276 or http://dx.doi.org/10.2139/ssrn.240276

Jan A. Kregel (Contact Author)

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504
United States
845-758-7700 (Phone)
845-758-1149 (Fax)

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