Following years of control and regulation, there has been a massive trend towards the liberalisation of financial markets. This volume provides an analysis of this process and considers likely future developments. It is divided into three parts: the first covers the behaviour of households and firms; the second includes papers on stock, bond and currency markets; and the third part analyses the behaviour and performance of financial intermediaries, particularly banks. The topics examined range from the demand for personal and corporate credit and the allocation of savers' wealth, to innovations in securities and services traded in financial markets, and their regulation. The essays represent a blend of both theoretical and empirical work, the latter focusing in particular on Europe and the recent integration of financial markets on the continent. Discussions of the essays are provided by some of the world's leading financial economists.
• Collection of essays providing a survey of the rapidly changing financial markets • Like our CEPR books on finance/Europe this is likely to appeal to a wider market of analysts in business, as well as academics and students • Contributors are good, and some of the discussants are big names in the field (Dornbusch, King, Spaventa)
List of figures; List of tables; Preface Sergio Siglienti; Acknowledgements; Notes on contributors; Introduction Vittorio Conti and Rony Hamaui; Part I. Households and Firms; Section 1. The Evolution and Allocation of Financial Wealth: 1. Marketable and non-marketable assets in households' portfolios: a cross-country comparison Claudio Giraldi, Rony Hamaui and Nicola Rossi; 2. Credit, money and consumption: time-series evidence for Italy Orazio P. Attanasio and Guglielmo Weber; Discussion Luigi Spaventa; Section 2. Financial Choices of Industrial Firms: The Italian Case: 3. Empirical determinants of corporate debt decisions: some evidence for Italy Leo Bonato, Riccardo Faini and Marco Ratti; Discussion Pippo Ranci; Part II. Financial Markets; Section 3. The Exchange Rate Market: 4. Financial liberalisation and exchange rate volatility Vittorio Grilli and Nouriel Roubini; 5. Capital mobility, vehicle currencies and exchange rate asymmetries in the EMS Vittorio Grilli and Nouriel Roubini; Discussion Rudiger Dornbusch; Section 4. The Equity Market: 6. Shifting gears: an economic evaluation of the reform of the Paris Bourse Marco Pagano and Ailsa Röell; 7. Front running and stock market liquidity Marco Pagano and Ailsa Röell; 8. Auction markets, dealership markets and execution risk Marco Pagano and Ailsa Röell; Discussion Robert J. Schiller; Section 5. The Bond Market: 9. The impact of a new futures contract on risk premia in the term structure: an APT analysis for French government bonds Alessandro Citanna and Riccardo Rovelli; Part III. Banks; Section 6. Issues in Asset Management: 10. The role of banks as investors in securities: theoretical and empirical features in an international perspective Umberto Cherubini, Massimo Ciampolini and Gregorio de Felice; 11. Loan sales and balance sheet assets Paolo Fulghieri; Discussion Mervyn King; Section 7. The Liability Side: 12. A comparative analysis of the liabilities structure in seven banking systems Mauro Maccarinelli, Giuseppe Marotta and Massimo Prosdocimi; 13. Deposit insurance: implications from financial intermediation theory Angelo Baglioni and Giuseppe Marotta; Discussion Mario Monti; Index.