EconPapers    
Economics at your fingertips  
 

International financial integration, crises, and monetary policy: evidence from the euro area interbank crises

Puriya Abbassi, Falk Bräuning, Falko Fecht () and Jose-Luis Peydro ()

No 17-6, Working Papers from Federal Reserve Bank of Boston

Abstract: We analyze how financial crises affect international financial integration, exploiting euro area proprietary interbank data, crisis and monetary policy shocks, and variation in loan terms to the same borrower on the same day by domestic versus foreign lenders. Crisis shocks reduce the supply of crossborder liquidity, with stronger volume effects than pricing effects, thereby impairing international financial integration. On the extensive margin, there is flight to home — but this is independent of quality. On the intensive margin, however, GIPS-headquartered debtor banks suffer in the Lehman crisis, but effects are stronger in the sovereign-debt crisis, especially for riskier banks. Nonstandard monetary policy improves interbank liquidity, but without fostering strong cross-border financial reintegration.

Keywords: financial integration; financial crises; cross-border lending; monetary policy; euro area sovereign crisis; liquidity (search for similar items in EconPapers)
JEL-codes: E58 F30 G01 G21 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-ifn, nep-mac, nep-mon and nep-opm
Date: 2017-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.bostonfed.org/publications/research-de ... monetary-policy.aspx Summary (text/html)
https://www.bostonfed.org/-/media/Documents/Workingpapers/PDF/2017/wp1706.pdf Full text (application/pdf)

Related works:
Working Paper: International financial integration, crises and monetary policy: evidence from the Euro area interbank crises (2018) Downloads
Working Paper: International financial integration, crises and monetary policy: evidence from the Euro area interbank crises (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbwp:17-6

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().

 
Page updated 2019-05-23
Handle: RePEc:fip:fedbwp:17-6