Legal Structure, Financial Structure, and the Monetary Policy Transmission Mechanism

Download or read book Legal Structure, Financial Structure, and the Monetary Policy Transmission Mechanism written by Stephen G. Cecchetti and published by . This book was released on 1999 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Among the many challenges facing the new Eurosystem is the possibility that the regions of the euro area will respond differently to interest rate changes. In this essay, I provide evidence that differences in financial structure are the proximate cause for these national asymmetries in the monetary policy transmission mechanism, and that these differences in financial structure are a result of differences in legal structure. My conclusion is that unless legal structures are harmonized across Europe, the financial structures and monetary transmission mechanisms of the European union countries will remain diverse.