EMU: some unanswered questions

Figure 2. Theoretical and empirical determinants of the asymmetric effects of the monetary
policy

In respect to the second aspect, as Rodriguez-Fuentes (1997, p. 217) affirms for the Spanish
case that: “... we could assume that the degree of (financial) development is homogeneous in a
given country as the financial system is not subjected to any kind of segmentation at a
regional level from an institutional point of view...” However, as the same author remarks (p.
219): “the fact that regulations do not promote a regional market segmentation does not imply
that there is no segmentation”. In this sense, the most important factor that can act as a
differentiating is the existence of region-specific financial agents. However, the effects of
regional banking on responses to monetary policy are not clear. In fact, they could be
ambiguous: on one hand, regions with a bigger number of region-specific banks could be less
affected by national monetary policy than the rest; but, on the other hand, it is possible that if
there is a great competition between regional and not-regional banks the response could be
greater. Moreover, it seems plausible that after the introduction of the Euro, the single
currency could act as “a catalyser, increasing the competition and accelerating structural
changes in the financial sector, promoting a real single market of financial services” (ECB,
1999). Taking into account this fact, it is possible that regional differences on financial

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