Search results for "financial integration"
showing 10 items of 16 documents
Repatriation of Debt in the Euro Crisis: Evidence for the Secondary Market Theory
2013
The Euro Crisis has marked a sharp inversion in the process of the European financial integration and, more specifically, a repatriation of countries' debt from foreign to domestic investors. Yet the drivers of the financial fragmentation remain unclear. This paper investigates the empirical patterns in light of competing theories of cross-border portfolio allocation. Three main empirical regularities stand out: i) the repatriation of debt occurred primarily in crisis countries; ii) the repatriation affected mainly public debt; iii) the public debt of crisis countries was reallocated to politically influential countries within the Euro Area. Standard theories of portfolio allocation and hom…
The economic impact of European financial integration: The importance of the banking union
2015
Abstract The aim of the paper is to analyze the effect of European financial integration on economic growth. We focus on how the international financial crisis that started in 2007 has affected integration and growth. By combining information at country, sector and firm level, we quantify the effect of financial integration on financial development and therefore on economic growth. Our results illustrate that until the outbreak of the crisis, a significant part of financial development is attributable to progress in integration, with a positive contribution of around 0.04 pp to the EU-15 countries’ GDP growth over the period 1999–2007 of advance in integration. However, during the crisis, t…
The determinants of increasing equity market comovement: economic or financial integration?
2010
This paper investigates to what extent the substantial increase in exposures of local European equity market returns to global shocks is mainly due to a convergence in cash flows (“economic integration”), to a convergence in discount rates (“financial integration”), or to both. We find that this increased exposure is nearly entirely due to increasing discount-rate betas. This finding is robust to alternative ways of calculating discount-rate and cash-flow shocks.
Western European Studies: Economics
2004
In this entry, we overview major developments of Western European studies in Economics in the last two decades. Given the richness of contributions in this field, we decided to restrict our discussion to three general topics: the theory of economic and financial integration; the economics of unemployment and the microeconomic foundations of market regulation. In the Section 1, we present the evolutions of thought on European monetary and economic integration, with particular emphasis on the discussion of exchange rate regimes, the role of policy authorities, and the cost–benefit analysis related to the establishment of a European monetary union. In Section 2, we examine some results produce…
Financial Integration and Fiscal Policy
2011
The aim of this paper is to assess the impact of financial integration on fiscal policy. Using an unbalanced panel of 31 OECD countries from 1970 to 2009, the paper shows that financial integration has significant disciplinary effects by reducing fiscal deficits and (discretionary) spending volatility. In addition, we find that financial integration affects the composition of government debt and enhances risk-sharing by increasing the share of foreign debt to the total. The results are robust to both de jure and de facto measures of financial integration, different measures of budget balance, and different estimation strategies.
Integration and competition in the European financial markets
2007
Financial integration in Europe should affect the competition between markets and intermediaries and generate a convergence of both interest rates and margins among the different countries. This paper analyses the evolution of the convergence in interest rates and the level of competition and its inequalities among the European banking systems for the period 1993 to 2001. The inequality index used ?the Theil index- allows us to break down the inequalities so that the importance of either a country effect or a specialization effect is quantified. If the former effect dominates it would mean that the national banking markets are segmented as a consequence of the existence of obstacles or barr…
Les mouvements de capitaux en union économique et monétaire : approches historiques et théoriques
2019
The liberalization of international capital flows seems linked to the increase and worsening of financial crisis. Since the financial crisis in 2007-2008, the ideological dimension of “happy globalization” has brought to light and given new strength to dissentient voices that could not be heard before. This thesis tries to evaluate the importance of capital flows on the stability of à financial system. Its purpose is to compare different financial systems and levels of financial liberalization, using the Economic and Monetary Union as an example because it combined full liberalization of the capital market within the zone a well as in relations with the outside. We have considered the need …
The Euro-Mediterranean Partnership and Financial Integration: a first assessment for selected countries
2009
In this paper, we try to provide a first assessment on the extent of financial integration and convergence between selected European and Southern Mediterranean countries involved in the Barcelona process. In particular, we implement a simple test of capital mobility based on the verification of the international real interest parity hypothesis between domestic rates against the real rate of Germany, used as the European reference country, and against the real rate of the US. We repeat the test before and after the introduction of the Euro, and then measure the speed of real interest rate convergence.
How Financial Freedom and Integration Change Public Debt Impact on Financial Development in the Asia-Pacific: A Panel Smooth Transition Regression Ap…
2018
This study investigates the non‐linear effect of fiscal policy (measured by total domestic public sector debt) on the level of financial development, using a balanced panel of 22 economies in the Asia‐Pacific region. Governments in less developed financial institutional infrastructure (for instance, emerging markets) tend to abuse their power by intervening in the domestic debt market. This study shows that better financial institutional infrastructure helps to discipline governments. The results suggest a negative effect of domestic public sector debt on financial development, but only at low level of financial freedom and integration. Higher financial freedom and financial integration wou…
Future directions in international financial integration research - A crowdsourced perspective
2018
This paper is the result of a crowdsourced effort to surface perspectives on the present and future direction of international finance. The authors are researchers in financial economics who attended the INFINITI 2017 conference in the University of Valencia in June 2017 and who participated in the crowdsourcing via the Overleaf platform. This paper highlights the actual state of scientific knowledge in a multitude of fields in finance and proposes different directions for future research.