Financial Dollarization and European Union Membership
We analyse the effect of European Union (EU) membership on financial dollarization for the Central and Eastern European countries. Using a unique monthly data set that spans about two decades, we find that both the accession process towards EU membership and EU entry have a direct impact on deposit dollarization (DD) and loan dollarization (LD). EU membership reduces DD while it increases LD. The negative effect on DD captures the increased confidence of the private sector in the domestic currency, as they consider the EU admission process a reflection of their government's commitment to promoting policies of long-run currency stability. The positive impact on credit dollarization is the outcome of a greater convergence of exchange rates to the euro and the subsequent anticipation of lower currency risk, which diminishes the cost of foreign currency borrowing. Copyright 2010 Blackwell Publishing Ltd
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 13 (2010)
Issue (Month): 2 (08)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=1367-0271|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=1367-0271|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eduardo Levy Yeyati, 2006.
"Financial dollarization: evaluating the consequences,"
CEPR;CES;MSH, vol. 21(45), pages 61-118, 01.
- Eduardo Levy-Yeyati, 2004. "FINANCIAL DOLLARIZATION: Evaluating the consequences," Econometric Society 2004 Latin American Meetings 184, Econometric Society.
- Eduardo Levy Yeyati, 2005. "Financial Dollarisation: Evaluating The Consequences," Business School Working Papers findollarisation, Universidad Torcuato Di Tella.
- Philip R. Lane & Gian Maria Milesi-Ferretti, 2006.
"The External Wealth of Nations Mark II: Revised and Extended Estimates of Foreign Assets and Liabilities,1970–2004,"
The Institute for International Integration Studies Discussion Paper Series
- Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2007. "The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities, 1970-2004," Journal of International Economics, Elsevier, vol. 73(2), pages 223-250, November.
- Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2006. "The External Wealth of Nations Mark II: Revised and Extended Estimates of Foreign Assets and Liabilities, 1970-2004," CEPR Discussion Papers 5644, C.E.P.R. Discussion Papers.
- Basso, Henrique S. & Calvo-Gonzalez, Oscar & Jurgilas, Marius, 2007. "Financial dollarization: the role of banks and interest rates," Working Paper Series 0748, European Central Bank.
- Honig, Adam, 2009. "Dollarization, exchange rate regimes and government quality," Journal of International Money and Finance, Elsevier, vol. 28(2), pages 198-214, March.
- Kyriakos C. Neanidis & Christos S. Savva, 2009.
"Financial Dollarization: Short-Run Determinants in Transition Economies,"
Centre for Growth and Business Cycle Research Discussion Paper Series
113, Economics, The Univeristy of Manchester.
- Neanidis, Kyriakos C. & Savva, Christos S., 2009. "Financial dollarization: Short-run determinants in transition economies," Journal of Banking & Finance, Elsevier, vol. 33(10), pages 1860-1873, October.
- Eduardo Levy Yeyati & Ernesto Schargrodsky & Sebastián Galiani, 2003.
"Finantial Dollarization and Debt Deflation under a Currency Board,"
Business School Working Papers
tres, Universidad Torcuato Di Tella.
- Galiani, Sebastian & Levy Yeyati, Eduardo & Schargrodsky, Ernesto, 2003. "Financial dollarization and debt deflation under a currency board," Emerging Markets Review, Elsevier, vol. 4(4), pages 340-367, December.
- Sebastian Galiani & Eduardo Levy Yeyati & Ernesto Schargrodsky, 2003. "Financial Dollarization and Debt Deflation under a Currency Board," Working Papers 64, Universidad de San Andres, Departamento de Economia, revised Nov 2003.
- Honohan, Patrick, 2007.
"Dollarization and exchange rate fluctuations,"
Policy Research Working Paper Series
4172, The World Bank.
- Honohan, Patrick, 2007. "Dollarization and Exchange Rate Fluctuations," CEPR Discussion Papers 6205, C.E.P.R. Discussion Papers.
- Patrick Honohan, 2007. "Dollarization and Exchange Rate Fluctuations," The Institute for International Integration Studies Discussion Paper Series iiisdp201, IIIS.
- Carlos O. Arteta, 2002.
"Exchange rate regimes and financial dollarization: does flexibility reduce bank currency mismatches?,"
International Finance Discussion Papers
738, Board of Governors of the Federal Reserve System (U.S.).
- Carlos Óscar Arteta, 2003. "Exchange Rate Regimes and Financial Dollarization: Does Flexibility Reduce Bank Currency Mismatches?," International Finance 0303005, EconWPA.
- Ize, Alain & Yeyati, Eduardo Levy, 2003. "Financial dollarization," Journal of International Economics, Elsevier, vol. 59(2), pages 323-347, March.
- Hans Genberg, 2002. "Currency Substitution in Anticipation of EU Accession," IHEID Working Papers 08-2002, Economics Section, The Graduate Institute of International Studies.
- Luca, Alina & Petrova, Iva, 2008. "What drives credit dollarization in transition economies?," Journal of Banking & Finance, Elsevier, vol. 32(5), pages 858-869, May.
When requesting a correction, please mention this item's handle: RePEc:bla:intfin:v:13:y:2010:i:2:p:257-282. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.