What lies beneath the euro's effect on financial integration
Subtitle: currency risk, legal harmonization, or trade?
By: Sebnem Kalemli-Ozcan, Elias Papaioannou, José-Luis Peydró.
Contributors: Papaioannou, Elias.; Peydró, José-Luis.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 15034; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15034.
Publisher: National Bureau of Economic Research
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "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 explains part of the total effect, whereas trade has no role in explaining the euro's positive effect on integration"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/9/2009.

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