Financial Integration at Times of Financial Instability

Jan Babecký, Lubos Komarek () and Zlatuse Komarkova ()

Czech Journal of Economics and Finance (Finance a uver), 2013, vol. 63, issue 1, 25-45

Abstract: This article empirically analyzes the phenomenon of financial integration, focusing primarily on assessing the impacts of the current financial crisis. We start our analysis with an overview of cost-benefit considerations associated with the process of financial integration. We go on to examine the relationship between financial integration and financial instability, emphasizing the priority role of financial innovation. The subsequent empirical section provides an analysis of the speed and level of integration of the Czech financial market and the markets of selected inflation-targeting Central European economies (Hungary and Poland) and advanced Western European economies (Sweden and the UK) with the euro area. The results for the Czech Republic reveal that a process of increasing financial integration has been going on steadily since the end of the 1990s and also that the financial crisis caused only temporary price divergence of the Czech financial market from the euro area market.

Keywords: beta-convergence; financial crisis; financial integration; gamma-convergence; new EU Member States; propagation of shocks; sigma-convergence (search for similar items in EconPapers)
JEL-codes: C23 G12 G15 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Chapter: Financial Integration at Times of Financial (In)Stability (2010)
Working Paper: Financial Integration at Times of Financial Instability (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:63:y:2013:i:1:p:25-45

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