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Monetary and financial integration: Evidence from the EMU

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Listed author(s):
  • Spiegel, Mark M.

Abstract

This paper examines the impact of European Monetary Union (EMU) accession on bilateral international commercial bank lending patterns. Using a difference-in-differences methodology, I demonstrate that accession to the EMU was accompanied by a change in Portuguese and Greek borrowing in favor of borrowing from their EMU partner nations. This extends the evidence in the literature that overall international borrowing is facilitated by the creation of a monetary union, and raises the possibility of financial diversion. J. Japanese Int. Economies 23 (2) (2009) 114-130.

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Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 23 (2009)
Issue (Month): 2 (June)
Pages: 114-130

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Handle: RePEc:eee:jjieco:v:23:y:2009:i:2:p:114-130
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622903

Keywords: Monetary union Financial integration Difference-in-differences Portugal Greece;

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  1. Portes, Richard & Rey, Helene, 2005. "The determinants of cross-border equity flows," Journal of International Economics, Elsevier, vol. 65(2), pages 269-296, March.
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  8. Mark M. Spiegel, 2004. "Monetary and financial integration: evidence from Portuguese borrowing patterns," Working Paper Series 2004-07, Federal Reserve Bank of San Francisco.
  9. Jappelli, Tullio & Pagano, Marco, 2008. "Financial market integration under EMU," CFS Working Paper Series 2008/33, Center for Financial Studies (CFS).
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  12. Olivier Blanchard & Francesco Giavazzi, 2002. "Current Account Deficits in the Euro Area: The End of the Feldstein Horioka Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(2), pages 147-210.
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