The fundamental determinants of financial integration in the European Union

Variable

Countries

y = 12
V'     r ∙                  ∙ Euro     -,

ʌ    I- ^l t , t + 3 ~ ^l t , t + 3 I i

A ^Year     =   } = ¹_______________________________

ɪ Domestic

12

Germany, France, Netherlands,
United Kingdom.

j = 12

ɪ' ^^lt,t + 3~^lt,t + 3~(ft    ~ ^S t ) 1 j

r Year      ₌ j = 1        ’_____________________________________________________

⅛ Domestic

12

Austria, Belgium, Denmark, Fin-
land, Italy, Spain, Sweden.

Representative three-month domestic money-market interest rates

Finding consistent comparable interest rate data for the EU countries under consideration is far from easy. To the extent possible, given
data availability over long sample periods, we tried to use publicly available representative three-month money-market interest rates
(monthly series). The integration of one segment of the money-market, that is taking one asset among many, may give a misleading
impression of the overall short-term mobility of capital. This problem may partly be overcome by the use of representative short-term
interest rates. Quoting the OECD (1990b, p. 45): "[...] the aim has not necessarily been to take the same rate for all countries, but to
choose the rates which are the most typical or the most revealing, or again, those which may be described as the ‘reference' rates. In
drawing up the following norms, while attention has, of course, been given to ensuring as much international comparability as possible, it
has nevertheless been necessary to have regard for the fact that the methods of calculation used by countries to some extent reflect the
institutional features of their financial markets."

Country

Period

Description

Source

Austria

January 1973-December 1993

3-month vibor

OECD, Financial Statistics Monthly, Part I

Belgium

January 1973-December 1993

3-month treasury bills

OECD, Financial Statistics Monthly, Part I

Denmark

January 1973-December 1975

January 1976-December 1993

Central bank deposit certificates

3-month interbank rate

OECD, Financial Statistics Monthly, Part I

OECD, Main Economic Indicators

Finland

January 1973-April 1987

May 1987-December 1993

Average cost of central bank financing

3-month helibor

OECD, Financial Statistics Monthly, Part I

OECD, Financial Statistics Monthly, Part I

France

January 1973-December 1993

3-month pibor

OECD, Financial Statistics Monthly, Part I

Germany

January 1973-December 1993

3-month fibor

OECD, Financial Statistics Monthly, Part I

Italy

January 1973-December 1993

3-month treasury bills

OECD, Financial Statistics Monthly, Part I

Netherlands

January 1973-December 1985

January 1986-December 1993

3-month loans to local authorities

3-month aibor

OECD, Financial Statistics Monthly, Part I
OECD, Financial Statistics Monthly, Part I

Spain

January 1973-December 1976

January 1977-December 1993

Rates charged: Short-term credits up to
3 months

3-month interbank loans

OECD, Financial Statistics Monthly, Part I

OECD, Financial Statistics Monthly, Part I

Sweden

January 1973-December 1981

January 1982-December 1993

3-month treasury bills

3-month discount notes

OECD, Financial Statistics Monthly, Part I

OECD, Financial Statistics Monthly, Part I

United Kingdom

January 1973-December 1993

3-month interbank rate

OECD, Financial Statistics Monthly, Part I

Representative three-month Euro money-market interest rates

Representative three-month Euro money-market interest rates are available for the following EU countries: Germany, France, Netherlands
and the United Kingdom (monthly series).

Source: OECD, Financial Statistics Monthly, Part I.