To make these concepts operational, the ECB has adopted the following definition of financial integration: we consider the market for a given set of financial instruments or services to be fully integrated when all potential market participants in such market (i) are subject to a single set of rules when they decide to deal with those financial instruments or services, (ii) have equal access to this set of financial instruments or services, and (iii) are treated equally when they operate in the market.
While, in practice, we are facing a process of financial integration, this definition describes a state of full, or perfect, integration. By providing a benchmark against which we can assess the state of financial integration, this definition underpins our analytical and empirical analysis.