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What lies beneath the euro's effect on financial integration? currency risk, legal harmonization, or trade?

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dc.contributor.author Kalemli-Ozcan, Sebnem
dc.contributor.author Papaioannou, Elias
dc.contributor.author Peydró, José-Luis
dc.date.accessioned 2020-09-02T10:40:26Z
dc.date.available 2020-09-02T10:40:26Z
dc.date.issued 2010-06
dc.identifier.issn ISSN 1725-2806 (online)
dc.identifier.uri http://hdl.handle.net/10230/45247
dc.description.abstract Although recent research shows that the euro has spurred cross-border financial integration, the exact mechanisms remain unknown. We investigate the underlying channels of the euro’s effect on financial integration using data on bilateral banking linkages among twenty industrial countries in the past thirty years. We also construct a dataset that records the timing of legislative-regulatory harmonization policies in financial services across the European Union. We find that the euro’s impact on financial integration is primarily driven by eliminating the currency risk. Legislative-regulatory convergence has also contributed to the spur of cross-border financial transactions. Trade in goods, while highly correlated with bilateral financial activities, does not play a key role in explaining the euro’s positive effect on financial integration.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Working Papers Series (European Central Bank);1216 (June 2010)
dc.rights © Tots els drets reservats
dc.subject.other Financial integration
dc.subject.other Law and finance
dc.subject.other Euro
dc.subject.other European Union
dc.subject.other FSAP
dc.subject.other Trade
dc.subject.other Regulation
dc.title What lies beneath the euro's effect on financial integration? currency risk, legal harmonization, or trade?
dc.type info:eu-repo/semantics/workingPaper
dc.rights.accessRights info:eu-repo/semantics/openAccess

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