International financial integration
Subtitle: a study of interest differentials between the major industrial countries
By: Richard C. Marston.
Series: Japan-U.S. Center Sanwa monographs on international financial markets
Publisher: Cambridge University Press
Published: 1995
Place of publication: Cambridge; New York
Language: eng
Number of pages: 197
Subjects: Foreign exchange rates.; Interest rates.; International finance.; Monetary policy -- International cooperation.
Description: In the past two decades, national financial markets in the major industrial countries have undergone a revolutionary change. Market pricing has replaced price-setting by government regulation or market conventions, and the removal of capital controls has opened national markets to international competition. Along with changes in markets has come improved understanding of how interest rates across different currencies are related.

This study examines the progress in integrating the financial markets of the Group of Five (G-5) industrial countries: Britain, France, Germany, Japan and the United States. Professor Marston shows that deregulation and liberalization have succeeded to such an extent that interest rates in any single currency are nearly the same regardless of whether they are offered in national or Eurocurrency markets. Currency denomination remains a barrier to full financial integration, however, since both nominal and real returns on financial instruments vary widely by currency, even between currencies tied together by the European Monetary System.

This study examines relative returns in the money and bond markets of these countries, investigating whether there are systematic variations in relative returns across currencies.
Notes: Includes bibliographical references (p. 186-193) and index.