Finance

Euro- area financial markets have seen an advancement both qualitatively and quantitatively since the introduction of the Euro and in particular the London financial market whose role remains as relevant if not more important than ever before. An integrated and competitive money market in the Euro zone has been as a result of the introduction of the Euro and its attendant policy framework.

Influence
The London financial market has been witness to the effects of enhanced competition since the advent of the single currency as prior to its introduction, the various currencies provided a stumbling bloc to integrated financial markets thus the flow of capital towards the most productive investments could not be witnessed. Previously restrained competition forces have been unleashed (Studener, 2004).

Competition in the private sector has been enhanced as it is generally acknowledged that one of the benefits of greater competition is the resultant low cost to consumers.

Competition between sovereign issuers-Sovereign issuers traditionally held monopolies in their financial markets but the use of the Euro signifies competition against each other for a wider pool of private savings. This can be cited as the reason the British Government instituted reforms aimed at their bond markets to bring them in line with the best standards resulting in the best investments. The Euros influence in highlighting the shortcomings of the bond markets cannot be gainsaid resulting in unparalleled benefits to investors.

Competition between Regulators and Legislators-The onset of the Euro signified the continued circulation of capital on a large scale across the financial markets and London was no exception. Pressure was on legislators to provide the financial markets with highly competitive environments. An example of this is when European countries such as France passed legislation which was aimed at providing a similar standard to the German Pfandbrief market which for a while had been deemed as a standard for mortgage bond markets. Investors in the London financial market have seen competition which has resulted in a convergence of legislation resulting in high returns for investors.

Competition between the various financial structure models i.e. competition between the intermediated model that revolves around bank lending and the disinter-mediated model based on bank securities has seen a relative upsurge both in the equity market and the private bond market. The result is that a wider range of options is accessible to the borrower thus enabling entrepreneurs to gain the kind of capital most beneficial to them.

The Euro financial market is without a center-The Euro has not only gone from being a regional currency especially as it was designed to be so but has also found footing in markets outside the European Union. The competitiveness of financial centers had been touted before the Euro came into effect and it would have been interesting to see which markets would play hosts to what but that has yet to take root. The London financial market still remains dominant in foreign exchange trading holding almost one-third of the global foreign exchange turnover as per the Survey of Foreign Exchange and Derivatives Market Authority (Studener, 2004).

Traditionally, London has dominated trade in many currencies. Trade in the Euro much like the US dollar means dealing with international markets instead of regional ones. The Euro becomes attractive to markets such as the London financial market as it is clear size is so large hence making it very attractive to investors

During times of crisis such as the 11th September 2001 attacks the Euro has had a calming effect on global markets. Major European banks had to undertake the enormous task of liquidating U.S banks. This was made possible due to an agreement between the European Central Bank and the Federal Reserve. The reverse is also tenable. Such collaborative and pre-emptive measures are aimed at maintaining financial stability in global markets and this has in turn been beneficial to the London financial market.

Conclusion
Interdependence has arisen between global financial stability and domestic financial stability as markets become globalized.As this happens financial stability has to be thought of and achieved within a global structure. Jurisdictions have to ensure cooperation especially in times of crisis such as the economic crisis that began in late 2008.