Volatility of Cross-Border Financial Flows and Policy Responses
Dorina Clichici () and
Victoria Iordachi ()
Additional contact information
Dorina Clichici: Ph.D., Institute for World Economy, Romanian Academy
Victoria Iordachi: Ph.D., National Institute for Economic Research Academy of Sciences of Moldova
Global Economic Observer, 2017, vol. 5, issue 1
The last global financial crisis has shown that the volatility of financial flows has adverse impacts on growth prospects and has an important role from a financial stability perspective. The article has the purpose to analyze why Europe was the most affected region by a reversal and a heightened volatility of cross-border flows both during the global financial crisis and in the aftermath of it, and to identify the main policy responses to this issue at the international and European level. For achieving these purposes the authors review the benefits and the costs of financial integration and present the main characteristics of cross-border capital flows with destabilizing effects on financial markets. The analysis finds that significant progress related to managing the volatility of financial flows through regulatory and supervisory reform of the financial market have been made since 2008, both at the international and European level. However, further steps should be taken for enhancing cross-border cooperation at the global level in order to effectively use the limited implementation resources. For preserving the financial stability in Europe further actions should be implemented to address the existing weaknesses related to adverse incentives or moral hazard risks by a deeper financial and fiscal integration.
Keywords: cross-border financial flows; financial integration; volatility; financial crisis; financial stability; policy responses; the U.S.; the euro area (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://www.globeco.ro/wp-content/uploads/vol/split ... vol5_no1_art_015.pdf First version, 2017 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ntu:ntugeo:vol5-iss1-17-118
Access Statistics for this article
Global Economic Observer is currently edited by Serghei Margulescu and Simona Moagar-Poladian
More articles in Global Economic Observer from "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences Contact information at EDIRC., Institute for World Economy of the Romanian Academy
Series data maintained by Stefan Ciucu ().