As in the case of the secured money market, national legal provisions and fragmented securities settlement systems prevent the integration process in the stock and bond markets from deepening more fully. As regards banking markets in the euro area, the ECB integration indicators show that retail banking is generally far less integrated than wholesale banking and banks’ capital market-related activities.
Cross-border inter-bank loans and cross-border holdings of securities have, in relative terms, experienced substantial growth. Cross-border loans of euro area monetary financial institutions (MFI) to other euro area countries have increased from 15% at the end of 1997 to 23% in the middle of 2005.