The Links Between Central, East European and Western Security Markets

Abstract

Over the last few years, Central and East European economies have become more integrated with the West European economy. In general, these economies have become more market-oriented and restrictions on foreign investment have been relaxed. An important step in this development was the admission of eight East European countries to the European Union (EU) in 2004. As the economic ties between Western, Central and Eastern Europe strengthen, one would naturally expect the financial markets to follow suit and become more integrated as well. A good example is the historical case of the Italian and German government bond markets: Before 1999 these two markets differed markedly in terms of credit quality and price volatility, but since the creation of the Euro zone in 1999 they have become highly similar.

Citation

Kouwenberg, R. and Mentink, A. (2006), "The Links Between Central, East European and Western Security Markets", Batten, J.A. and Kearney, C. (Ed.) Emerging European Financial Markets: Independence and Integration Post-Enlargement (International Finance Review, Vol. 6), Emerald Group Publishing Limited, Leeds, pp. 353-381. https://doi.org/10.1016/S1569-3767(05)06014-0