AbstractCurrent account (CA) dispersion within European Union (EU) Member States has been increasing progressively since the 1990s. Interestingly, the persistent deficits in many peripheral countries have not been accompanied by a significant growth process able to stimulate a log run rebalancing as neoclassical theory predicts. To shed light on the issue, this paper investigates the determinants of EurozoneCAimbalances, focusing on the role played by financial integration. The analysis considers two samples of 22OECDand 15EUcountries, three time horizons corresponding to various steps in European integration, different control variables and several panel econometric methods. The results suggest that within theEUgroup of countries financial integration contributed to explain theCAdeterioration in the peripheral countries especially in the post‐EMUperiod creating an asymmetric behaviour within theEMU. From a financial stability perspective, this ‘divergence’ could hinder the effectiveness of monetary policy. By reducing the apparent benefits of participating in the monetary union, it also raises the risk of a break‐up.