Cross-country bond investments (within EMU) are significantly greater than among non-EMU countries, a phenomenon known as “euro area bias”. Factors that explain bond cross-investment flows include...

Cross-country bond investments (within EMU) are significantly greater than among non-EMU countries, a phenomenon known as “euro area bias”. Factors that explain bond cross-investment flows include informational barriers, exchange-rate stability, and the level of trade linkages among and between countries.