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Federal Reserve Bank of New York
Economic Policy Review
Legal structure, financial structure, and the monetary policy transmission mechanism
Stephen G. Cecchetti
Abstract

Among the many challenges facing the new Eurosystem - the European Central Bank and the central banks of the eleven members of the European Monetary Union - is the possibility that participating countries will respond differently to interest rate changes. This paper provides evidence that differences in financial structure are the proximate cause for these national asymmetries in monetary policy transmission and that these differences in financial structure are a result of differences in legal structure. The author concludes that unless legal structures are harmonized across Europe, the financial structures and monetary transmission mechanisms of the European Union countries will remain diverse


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Stephen G. Cecchetti, "Legal structure, financial structure, and the monetary policy transmission mechanism" , Federal Reserve Bank of New York, Economic Policy Review, issue Jul, pages 9-28, 1999.
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Keywords: European Central Bank ; European Monetary System (Organization) ; Monetary policy - Europe ; Europe
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