Banks, Financial Markets and International Consumption Risk Sharing

Markus Leibrecht and Johann Scharler

No 2009-14, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

Abstract: In this paper we empirically explore how characteristics of the domestic financial system influence the international allocation of consumption risk using a sample of OECD countries. Our results show that the extent of risk sharing achieved does not depend on the overall development of the domestic financial system per se. Rather, it depends on how the financial system is organized. Specifically, we find that coun- tries characterized by developed financial markets are less exposed to idiosyncratic risk, whereas the development of the banking sector contributes little to the inter- national diversification of consumption risk.

Keywords: International Risk Sharing; Financial Development; Financial System (search for similar items in EconPapers)
JEL-codes: F36 F41 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2009-10
New Economics Papers: this item is included in nep-ban and nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Banks, Financial Markets and International Consumption Risk Sharing (2012)
Journal Article: Banks, Financial Markets and International Consumption Risk Sharing (2012)
Working Paper: Banks, Financial Markets and International Consumption Risk Sharing (2010)
Working Paper: Banks, Financial Markets and International Consumption Risk Sharing (2009)
Working Paper: Banks, financial markets, and international consumption risk sharing (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:jku:econwp:2009_14

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