Financial Integration at Times of Financial (In)Stability
In: CNB Financial Stability Report 2009/2010
AbstractThis article analyses the phenomenon of financial integration on both the theoretical and empirical level, focusing primarily on assessing the impacts of the current financial crisis. In the theoretical section we first look at the definition of financial integration and summarise the benefits and costs associated with this process. We go on to examine the relationship between financial integration and financial (in)stability, emphasising the priority role of financial innovation. The subsequent empirical section provides an analysis of the speed and level of integration of the Czech financial market and the markets of selected inflation-targeting Central European economies (Hungary and Poland) and advanced Western European economies (Sweden and the UK) with the euro area. The results for the Czech Republic reveal that a process of increasing financial integration has been going on steadily since the end of the 1990s and also that the financial crisis caused only temporary price divergence of the Czech financial market from the euro area market.
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This chapter was published in: Jan Babecky & Lubos Komarek & Zlatuse Komarkova CNB Financial Stability Report 2009/2010, , chapter Thematic Article 2, pages 102-109, 2010.
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Other versions of this item:
- Jan Babecky & Lubos Komarek & Zlatuse Komarkova, 2013. "Financial Integration at Times of Financial Instability," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(1), pages 25-45, March.
- Jan Babecky & Lubos Komarek & Zlatuse Komarkova, 2010. "Financial Integration at Times of Financial Instability," Working Papers 2010/09, Czech National Bank, Research Department.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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