Are Banking and Capital Markets Union Complements? Evidence from Channels of Risk Sharing in the Eurozone
Mathias Hoffmann (),
Bent Sorensen and
Iryna Stewen ()
No 13254, CEPR Discussion Papers from C.E.P.R. Discussion Papers
The interplay of equity market and banking integration is of first-order importance for risk sharing in the EMU. While EMU created an integrated interbank market, "direct'' banking integration (in terms of direct cross-border bank-to-real sector flows or cross-border banking-consolidation) and equity market integration remained limited. We find that direct banking integration is associated with more risk sharing, while interbank integration is not. Further, interbank integration proved to be highly procyclical, which contributed to the freeze in risk sharing after 2008. Based on this evidence, and a stylized DSGE model, we discuss implications for banking union. Our results show that real banking integration and capital market union are complements and robust risk sharing in the EMU requires both.
Keywords: Banking Union; Capital Union (search for similar items in EconPapers)
JEL-codes: F15 F36 F45 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-eec and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at firstname.lastname@example.org
Working Paper: Are banking and capital markets union complements? Evidence from channels of risk sharing in the eurozone (2018)
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:cpr:ceprdp:13254
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=13254
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().