On Deepen Of Financial Integration Of Eurozone

In the context of the global financial integration, as an important economic power in the world, the financial integration of the EU is not only important to the economic growth of itself, but also has a far-reaching impact to the whole world's economic development. May 1, 2004, the successful completion of the EU's expansion added a new challenge and vigor for the financial integration of euro area. The EU financial integration is an excellent example in the worldwide financial integration.Up to the present, the EU has been basically eliminated a variety of direct cross-border restrictions on the internal free flow of capital, financial services is free to trade in the EU. A unified wholesale market of financial services is settled, and the EU also promulgated many laws to further the road of EU financial integration. For example, the "investment services directive" settled the EU securities market "single license" system, effectively handled the discrimination from host country's regulatory system to the other EU members, and also promoted the reunification of the EU securities market. "Manual instructions" removed the obstacles of listing cross-border securities issuance. "Market abuse directive" established a new EU ban to prohibit insider trading and abuse of the market system. "Transparency directive" established a system of information disclosure for listed companies. However, the deepening of EU's financial integration still faced a lot of challenges, and the main reason is that the EU is a political coalition of different countries, which is lack of unified management.The deepening development of EU financial integration has a very strong sense for China's own financial integration. China's market economy started rather late, after 30 years development, the economic greatly improved. But China's financial industry in still on the way of development, and the regional development is not balanced throughout the country. This requires China to further promote financial integration, as a means to promote development of western China and revitalize the old northeast industrial base in a smooth way.This paper is divided into five parts.The first part is simple description for the theory of financial integration and the factors influencing its development. Finance integration is that the financial activities of mutual infiltration and influences each other between different countries. The main influencing factors of financial integration are differences in financial resources, the financial efficiency, the financial industry and the degree of openness, as well as various constraints, which are national or international.The second part discusses the deepening and the challenges of banking integration for the euro zone. There are three stages in the process of banking integration: the implementation of the national treatment, the principle of mutual recognition, and straighten out the regulatory system. Although the integration of banking sector has been greatly accelerated with the settle of the First Banking Directive, the Second Banking Directive, as well as the principle of single license identification, at present, the integration of banking sector is still faces various problems from the economic or legal aspects.The third part discusses the deepening and the challenges of finance integration for the euro zone. On the way of finance integration, there are advantages as well as inadequate. All direct laws have restrictions on cross-border capital have been lifted, which make financial services and financial entities agencies can smoothly transactions in the EU area. But integration of some financial markets in EU are still low, the gaps between laws and regulations inhibited the integration of financial instrument market. In the process of financial integration, there are still several challenges, such as the segmentation of the securities market, or monitoring systemsThe fourth part discusses the deepening and the challenges of financial supervision integration for the euro zone. First, introduces the financial supervision, which is including the self-discipline of social intermediary supervision, coordination between the member countries of supervision, the cooperation of EU regulatory agencies and the EU regulatory supervision. Second, EU continues take active measures to make sure of the financial supervision integration. For example, "financial instruments directive" update the EU's legal regulatory system of securities market, and has laid down the legal cornerstone of financial supervision integration. "Transparency directive" unified supervision of the EU information disclosure system to reduce the company's operating costs, and strengthened investor protection. "Anti-market abuse directive" established a new EU ban prohibiting insider trading and abuse of market system. The challenges of the financial supervision integration are mainly from the legislation and implementation, the cost raising, fairness and efficiency aspects.The fifth part tells the measures for EU to further strengthen the financial integration of euro zone, including the strengthening of political cooperation, the strengthening of financial legislation, the improve of regulatory efficiency. Judging from China's current financial situation, the main problems in China's financial integration process are the regional economic integration is at a low level, the management system is not perfect, and the level of financial development is low. Thus we should take market-oriented reform, strengthen the financial legislation, implement mixed operations, and improve the efficiency of financial supervision to promote the development of China's financial integration.