Financial Asymmetries, Risk Sharing and Growth in The EU

Eleonora Cavallaro (eleonora.cavallaro@uniroma1.it) and Ilaria Villani (ilaria.villani@ecb.europa.eu)
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Ilaria Villani: Banking Supervision, European Central Bank

No WP2024/21, Single Market Economics Papers from Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team

Abstract: This paper proposes an index to benchmark EU financial systems against their potential to enhance resilient growth and international risk sharing. It finds that the risk sharing mechanism is more effective in more stable financial environments, whereas a larger fraction of shocks remains unsmoothed in the lower financial clusters, especially in the aftermath of the global financial crisis, when the credit channel is significantly downsized.

Keywords: financial structure; financial heterogeneity; growth; volatility; risk sharing (search for similar items in EconPapers)
JEL-codes: E44 F15 F36 G1 O16 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2024-02
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-eec, nep-eur, nep-ifn, nep-opm and nep-rmg
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https://ec.europa.eu/docsroom/documents/58434/atta ... en/renditions/native (application/pdf)

Related works:
Working Paper: Financial asymmetries, risk sharing and growth in the EU (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bda:wpsmep:wp2024/21

DOI: 10.2873/420475

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