For example, the proportion of foreign stock and bond holdings of German investment funds increased from 15% in the mid-1990s to more than 50% after 1999. Notwithstanding increasingly homogenous reactions of stock prices to euro-area-wide factors and news, particularly from monetary policy, country effects still have an important explanatory role for the variance of equity returns.
Banking As regards the integration of the European banking markets, there has been some progress, but further integration is still desirable. The degree of integration varies across the various segments of banking business. Cross-border activities have increased significantly in inter-bank and wholesale business.