... country. Alternatives for not using monetary policy are possible fiscal and market policies. While applying market policies main aims of central banks are the efficiency and soundness of payment systems. In this paper, it will be discussed the nature of changes both in capital and money markets in EMU and observed efficiency and integration of Euro. Money Market Efficiency The single currency can be expected to deepen the integration and efficiency of national markets, reinforcing some of the benefits with the single market. First of all, the decline of exchange rate transaction costs will lead to an increase of trade flows within the Euro-area. Secondly, the elimination of exchange rate uncertainty will help reduce the risks associated with foreign trade or direct investment. Thirdly, the improving ability to compare business conditions and production costs across the Euro-area will companies more easily considers relocating their activities abroad. Finally, the increased price ...

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