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Monetary and Financial Integration: Evidence from the EMU

In: Financial Globalization, 20th Anniversary Conference, NBER-TCER-CEPR

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  • Mark M. Spiegel

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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  • Mark M. Spiegel, 2009. "Monetary and Financial Integration: Evidence from the EMU," NBER Chapters, in: Financial Globalization, 20th Anniversary Conference, NBER-TCER-CEPR, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:12016
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    as
    1. Gian Maria Milesi-Ferretti, & Philip R. Lane, 2003. "International Financial Integration," The Institute for International Integration Studies Discussion Paper Series iiisdp03, IIIS.
    2. Andrew K. Rose & Mark M. Spiegel, 2004. "A Gravity Model of Sovereign Lending: Trade, Default, and Credit," IMF Staff Papers, Palgrave Macmillan, vol. 51(s1), pages 50-63, June.
    3. Mark M. Spiegel, 2004. "Monetary and financial integration: evidence from Portuguese borrowing patterns," Working Paper Series 2004-07, Federal Reserve Bank of San Francisco.
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    8. Papaspyrou, Theodoros, 2004. "EMU strategies: lessons from Greece in view of EU enlargement," LSE Research Online Documents on Economics 5687, London School of Economics and Political Science, LSE Library.
    9. Philip R. Lane, 2006. "Global Bond Portfolios and EMU," International Journal of Central Banking, International Journal of Central Banking, vol. 2(2), May.
    10. 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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    12. Theodoros S. Papaspyrou, 2004. "EMU Strategies: Lessons from Past Experience in View of EU Enlargement," Working Papers 11, Bank of Greece.
    13. Coeurdacier , Nicolas & Martin, Philippe, 2007. "The geography of asset holdings: Evidence from Sweden," Working Paper Series 202, Sveriges Riksbank (Central Bank of Sweden).
    14. Canhoto, Ana & Dermine, Jean, 2003. "A note on banking efficiency in Portugal, New vs. Old banks," Journal of Banking & Finance, Elsevier, vol. 27(11), pages 2087-2098, November.
    15. 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.
    16. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 15(30), pages 08-45.
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