Measuring financial integration in Central Europe through international investment positions

Abstract

The establishment of Economic and Monetary Union in January 1999 was an important step in the process of European economic integration. Full financial market integration is one of the inevitable conditions for successful introduction of common currency, so the currency could circulate within the monetary union without any barriers. This allows more efficient allocation of the capital. This paper is focused on the analysis of the international investment positions of eight new EU member countries as one of the possible ways of measuring the level of financial integration.