At the cross-country level, evidence indicates that various measures of financial development (including assets of the financial intermediaries, liquid liabilities of financial institutions, domestic credit to private sector, stock and bond market capitalisation) are robustly and positively related to economic growth (King and Levine, 1993; Levine and Zervos, 1998).
Since the start of the year the external value of the euro has declined, bringing the effective exchange rate of the euro back to around the level observed for its constituent currencies in mid-1997. This development was strongly influenced by the cyclical divergence that strengthened the US dollar over the past few months.