Overall, the monetary transmission mechanism benefits from integrated and well-developed financial systems in the sense that it leads to a more similar and, in part, faster pass-through of market rates to bank rates. Efforts to strengthen bank competition and enhancing the availability of alternative capital market-based instruments as well as access to financing should therefore be expected to improve the monetary transmission mechanism.
At the same time, one has to acknowledge that several studies 7 on the productivity of the EU (euro area) from an industry point of view come to the conclusion that the differences in productivity growth between the US and the EU (euro area) may be partly due to differences in the financial sector.