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Global Bond Portfolios and EMU

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  • Philip R. Lane

    (IIIS and Economics Department, Trinity College Dublin and CEPR)

Abstract

This paper examines the bilateral composition of international bond portfolios for the euro area and the individual EMU member countries. I find considerable support for euroarea bias: EMU member countries disproportionately invest in one another relative to other country pairs. Another striking pattern is the positive connection between trade linkages and financial linkages in explaining asymmetries across EMU member countries in terms of their outward bond investments vis-à-vis external counterparties. My empirical results underline the impact of currency union on financial integration and support the notion that financial regionalization is the leading force underlying financial globalization.

Suggested Citation

  • Philip R. Lane, 2006. "Global Bond Portfolios and EMU," International Journal of Central Banking, International Journal of Central Banking, vol. 2(2), May.
    • Handle: RePEc:ijc:ijcjou:y:2006:q:2:a:1
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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