What has Europe Taught Us about Banking Integration and Financial Stability?

Authors

DEEV Oleg

Year of publication 2014
Type Article in Proceedings
Conference Proceedings of the 14th International Conference on Finance and Banking
MU Faculty or unit

Faculty of Economics and Administration

Citation
Web http://icfb.rs.opf.slu.cz/sites/icfb.rs.opf.slu.cz/files/07_deev.pdf
Field Management and administrative
Keywords banking integration; financial stability; panel cointegration analysis
Attached files
Description Financial theory advocates cross-border banking integration to lead to greater financial stability, as risks are spread around the world. The financial crisis has also shown us that in the integrated banking system the instability is easily propagated to otherwise healthy banking systems. This study is the first empirical examination of European cross-country relationship between banking integration and stability of the banking system. The study employs panel cointegration analysis to establish a highly significant negative impact of banking integration on financial stability in European countries.
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