Currently, euro area residents have almost 60% of their total bond portfolios in euro area cross-border bond holdings. It is interesting to see how the recent financial crisis has affected the evolution of our financial integration indicators in the money and government bond markets. In both markets, spreads and standard deviations of rates across euro area countries increased in 2008.
The turmoil in 2007 only seemed to affect the unsecured money market rates. The recent intensification, however, has led to a rise in the cross-country standard deviations of oneand twelve-month secured money market rates as well, from their usual level of 1.5 basis points to 5-6 basis points.