Analysis Of The Impact Of Financial Integration Of Central And East European Countries And European Union On Financial Stability

After the acute transformation in 1989,Central and Eastern European countries(CEEC)decided to "separate from Russia and return to Europe".According to the “Copenhagen Standards”,CEEC have undergone transformation in various fields and officially became members of the European Union in 2005.In this process,the financial integration between CEEC and the European Union has been deeper.Capital inflows from the EU have promoted economic growth in CEEC,and a closer financial link contributed to the development of its financial system.However,financial integration brings not only prosperity but also crisis.The financial systems of CEEC were suffered when the financial crisis outbroke in 2008,so did the real economy.While reviewing the relevant theoretical and the process of CEEC and the European Union,the impact of financial integration between these countries and the EU on financial stability was analyzed.This paper argues that financial integration has promoted the rapid development of financial markets in CEEC,resulting in excessive credit.At the same time,large cross-border capital flows will have an impact on the domestic financial system.Besides,while the financial system is open to the EU,the financial regulatory system unable to effectively supervise financial activities.These factors jointly undermine domestic financial stability.Furthermore,the paper provides some reference to China's further financial development.It believes that the opening of the financial system should be compatible with the domestic financial system.Foreign capital is not a panacea for economic development.Only with the upgrade of the real economy can we make better use of foreign capital.In addition,the construction of the regulatory system should be constantly improved.