Capital market integration in the EMU

United Kingdom
31/10/1999
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A group of financial experts offering advice to the European Commission on capital market integration in EMU, has submitted a report entitled “The EU Repo Markets: Opportunities for Change”. Repo is used by the European system of central banks as its main monetary policy tool to provide and drain liquidity from money markets. Financial institutions use Repos to manage their own liquidity position, and to support their bond and share market-making activities. The report found that domestic Repo markets are operating satisfactorily but the growth of the cross-border EU market is being held back by fragmented infrastructures, different market practices, and hard to reconcile legal and fiscal frameworks. It made recommendations to financial market operators, infrastructure providers and national and EU authorities on how to improve the situation and achieve a truly integrated and efficient EU capital market. The report was welcomed by the Commission. (IP/99/794, Financial Times, 27 October 1999)

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