Research Paper on:
Euro's Effects Upon the Bond Market of Italy

Unformatted Sample Text from the Research Paper:
capital markets. The bond markets were expected to become more liquid, and have a greater reflection of the relative risk of the bond. It was also expected that there would  be a higher level of competition in the bond market, this was seen by reducing or eliminating what was in effect a monopoly for governments that raised funds on their  own markets. It was also expected that this would bring down the returns on the government bonds as investors would look further a field to seek better returns and the  demand for government bonds faced more competition. If we undertook an analysis of the Italian bond market the statistics would demonstrate that it has become more stable, and that are  the entrance to the Euro drew nearer there was a lessening of gaps. However, it appears that the increased liquidity is only a recent phenomenon. If we consider the reasons  why this has occurred we need to look at the situation both prior and post introduction of the Euro. In seeking evidence  for a theory we also need to have a comparator against which we can measure the liquidity and rates of the Italian bond Market, only after this may we have  a measure against which to consider the changes in context. As a major contributor and a stable currency before the introduction of the Euro the Deutschmark and the German Bond  market will make a good comparator. It is interesting to note, that as we will see in this paper, these expected changes have not occurred ion the way they  were predicted. In some instances there has been a broadening rather than a narrowing of the different return rates, and the increased competition has not created a more liquid market.