INSEAD Library

Includes bibliographical references and index

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European Financial Markets and Institutions Contents List of Boxes List of Figures List of Tables List of Countries List of Abbreviations Preface page viii xiv xvi xviii xxiii Part I 1 Setting the Stage Functions of the Financial System 1.1 Functions of a financial system 1.2 Bank-based versus market-based financial systems 1.3 Conclusions 1 3 4 14 28 33 34 2 European Financial Integration: Origins and History 2.1 European integration: introduction 2.2 European institutions and instruments 2.3 Monetary integration 2.4 Financial integration 2.5 Conclusions Appendix: Examples of FSAP in action 36 42 48 55 56 Part II Financial Markets 3 European Financial Markets 3.1 Financial markets: functions and structure 3.2 Money market 61 63 65 71 3.3 Bond markets 3.4 Equity markets 3.5 Derivatives 3.6 Conclusions 77 91 97 103 107 108 112 117 125 131 135 136 147 151 160 4 The Economics of Financial Integration 4.1 Financial integration: definition and drivers 4.2 Measuring financial integration 4.3 Integration of European financial markets 4.4 The consequences of financial integration 4.5 Conclusions 5 Financial Infrastructures 5.1 Payment systems and post-trading services 5.2 Economic features of payment and securities market infrastructures 5.3 Integration of financial market infrastructures 5.4 Conclusions Part III Financial Institutions 6 The Role of Institutional Investors 6.1 Different types of institutional investors 6.2 The growth of institutional investors 6.3 Portfolio theory and international diversification 6.4 The home bias in European investment 6.5 Conclusions 165 167 168 180 187 191 200 204 205 212 220 232 236 237 240 244 250 255 7 European Banks 7.1 Theory of banking 7.2 The use of risk-management models 7.3 The European banking system 7.4 Conclusions 8 The Financial System of the New Member States 8.1 The financial system 8.2 The banking sector 8.3 What attracts foreign banks? 8.4 Financial integration and convergence 8.5 Conclusions 9 European Insurers and Financial Conglomerates 9.1 Theory of insurance 9.2 The use of risk-management models 9.3 The European insurance system 9.4 Financial conglomerates 9.5 Conclusions 259 260 273 279 288 293 Part IV Policies for the Financial Sector 10 Financial Regulation and Supervision 10.1 10.2 10.3 10.4 10.5 10.6 Rationale for government intervention Prudential supervision Conduct-of-business supervision Supervisory structures Challenges for financial supervision Conclusions 297 299 300 304 312 317 321 329 11 Financial Stability 11.1 11.2 11.3 11.4 11.5 Financial stability and systemic risk How can financial stability be maintained? The current organisational structure Challenges for maintaining financial stability Conclusions 334 335 346 353 356 365 12 European Competition Policy 12.1 12.2 12.3 12.4 12.5 What is competition policy? The economic rationale for competition policy Pillars of EU competition policy Assessment of dominant positions Institutional structure 371 372 373 378 383 391 395 399 12.6 Conclusions Index