Benefits and risks arising from progressive integration of financial markets in the European Union

Abstract

One of the reasons of the euro area crisis was a rapid inflow of foreign capital and a large increase in credit in the peripheral countries closing the development gap in relation to the countries of central and north Economic and Monetary Union. An important role in this process was played by freedom of capital movements and progressive integration of financial market, a key element in the creation of economic and monetary union. The purpose of this paper is to present potential benefits and risks arising from progressive integration of financial markets in the European Union.