The Concept of Market Integration

Financial markets are said to be integrated if assets of similar maturity give the same the risk– adjusted returns in various segments of the imagesmarkets. Financial markets all over the world have witnessed growing integration, within as well as across boundaries.

Financial market integration can take place horizontally and / or vertically. In the horizontal integration, inter-linkages occur among domestic financial market segments, while vertical integration occurs between domestic markets and international / regional financial markets.

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