Financial integration in Europe through the lens of composite indicators

Peter Hoffmann, Manfred Kremer () and Sonia Zaharia

Economics Letters, 2020, vol. 194, issue C

Abstract: This paper develops price- and quantity-based composite indicators of financial integration for the euro area. We develop a novel method that homogenises information from different market segments and benchmarks them to a state of perfect integration. The time-series development of both indicators shows that the global financial crisis and the ensuing sovereign debt crisis in the euro area led to considerable financial fragmentation from which the monetary union has not yet fully recovered. In a set of panel regressions for 19 member states, we find a significant positive association between financial integration and economic growth.

Keywords: Composite indicator; Economic growth; European monetary union; Financial integration; Financial stress (search for similar items in EconPapers)
JEL-codes: F36 F43 F45 G01 G15 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Financial integration in Europe through the lens of composite indicators (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:194:y:2020:i:c:s0165176520302226

DOI: 10.1016/j.econlet.2020.109344

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