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Lisa Bellinghausen
- 15 May 2026
- ECONOMIC BULLETIN - BOXAssessing cross-border integration of equity markets in the euro area: evidence from a gravity modelEconomic Bulletin Issue 3, 2026Details
- Abstract
- Euro area financial markets hold significant untapped potential: deeper cross-border integration would improve the allocation of savings, lower the cost of capital and strengthen capacity to finance investment and innovation. To assess how the integration of euro area equity markets has evolved over time, this box applies a structural gravity model, the workhorse of international trade analysis, to bilateral euro area equity holdings. The results show that intra-euro area frictions have declined only marginally since 2014, while barriers vis-à-vis the United States have fallen more than twice as fast – a gap that defines the gains that targeted reforms under the savings and investments union could help unlock.
- JEL Code
- C23 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Panel Data Models, Spatio-temporal Models
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
G15 : Financial Economics→General Financial Markets→International Financial Markets
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
- 7 May 2026
- FINANCIAL INTEGRATION AND STRUCTURE BOXFinancial Integration and Structure in the Euro Area 2026Details
- Abstract
- This box provides empirical evidence regarding a set of interrelated structural blockages that hinder European capital markets from supporting innovation and long-term growth. EU households save a significant share of their income yet disproportionately allocate assets to bank deposits or foreign equities, particularly in the United States, thus limiting domestic investment in high-tech sectors. Fragmentation in EU capital markets, driven by regulatory, tax and infrastructure disparities, exacerbates these issues. The efficient implementation of the policy measures proposed as part of the SIU strategy should advance the development and integration of capital markets.
- JEL Code
- E21, E22, F36, G11, G51 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth