Abstract—Efficient use of resources depends on better
allocation through financial systems. Development of financial
systems can be measured through the performance of banks,
financial markets and insurance companies. This paper
identifies several key attributes to measure the level of financial
development in Europe using data from 1990 to 2011. First, an
index is constructed by employing the method of Principal
Component Analysis to measure the strength of financial
systems in European countries. Second, based on relative
raking a comparison is made for better interpretation of results
in European countries. The top five countries include
Switzerland, United Kingdom, Netherlands, Spain and
Germany. The results of this study can be helpful to assess the
relative strength of European economies and frame future
policies to promote efficiency of financial systems.
Index Terms—Europe, financial systems, principal
component analysis.
The authors are with the Department of Management Sciences,
COMSATS Institute of Information Technology, Islamabad PC-44000,
Pakistan (e-mail: norinadnan@comsats.edu.pk,
jawadhussain@vcomsats.edu.pk).
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Cite: Noureen Adnan and Syed Jawad Hussain Shahzad, "The European Financial System in Limelight," International Journal of Trade, Economics and Finance vol.5, no.6, pp. 521-525, 2014.