Stock Market Integration in Europe

CAER II Discussion Paper No. 15

Posted: 10 Apr 1998

See all articles by Amir N. Licht

Amir N. Licht

Reichman University; European Corporate Governance Institute (ECGI)

Date Written: January 1998

Abstract

Western Europe today boasts some 35 stock exchanges. It is almost unanimously agreed that this number is too high and that in the future, European stock markets are likely to become fewer in number and more internationalized in their listings, trading, and membership.

Europe has also witnessed more exercises in stock market integration compared with any other region in the world. Initiatives toward this end were undertaken by regulators as well as the private sector (stock exchanges and investors). Consequently, Europe may be viewed as a gigantic laboratory in which real-life experiments in stock market integration were held. The fact that most of those efforts had failed or were abandoned first attests to the difficulties in achieving this goal. It may also indicate the conditions which should be more conductive to success. The paper attempts to tell the story of European stock market integration in a way that highlights the difficulties in attaining cooperation and the tools that were used to overcome them.

The main theme of this paper is that this integration process can only be understood as an integral part of a broader economic and political integration which EU countries have been pursuing for some 40 years. The European experience shows that considerable compromises are required for bringing about stock market integration. It is the broader framework of the EU, with its institutions, political implications, and momentum, that ensures that stock market integration proceeds on track, even if with occasional halts.

JEL Classification: G15, G18, K22

Suggested Citation

Licht, Amir N., Stock Market Integration in Europe (January 1998). CAER II Discussion Paper No. 15, Available at SSRN: https://ssrn.com/abstract=74976

Amir N. Licht (Contact Author)

Reichman University ( email )

Israel

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
952-9-9513323 (Fax)

HOME PAGE: http:/www.ecgi.org

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