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Economic Integration and Financial Stability :, A European Perspective, Gianni De Nicolo, Alexander Tieman

This paper assesses changes in synchronization of real activity and financial market integration in Western Europe and evaluates their implications for financial stability. We find increased synchronization of real activity since the early 1980s and increased equity markets integration since the early 1990s. We also find that measures of systemic risk at large European financial institutions have not declined during the period 1990-2004 and that bank systemic risk profiles have converged. At the same time, the sensitivity of bank and insurance systemic risk measures to common real and financial shocks has increased in most countries. Overall, these results suggest that the integration process does not necessarily entail an unambiguously positive effect on financial stability
Table Of Contents
""Economic Integration and Financial Stability: A European Perspective""; ""Contents""; ""I. INTRODUCTION""; ""II. SYNCHRONIZATION OF REAL ACTIVITY""; ""III. EQUITY MARKETS INTEGRATION""; ""IV. SYSTEMIC RISK AND INTEGRATION""; ""V. CONCLUSION""; ""Table 1. EGARCH Estimates for the Common Components of IPG""; ""Table 2. EGARCH Estimates for Cross-Country Variances of IPG and De-Trended IPG""; ""Table 3. Country-by-Country EGARCH Estimates for IPG""; ""Table 4. Dependent Variables: Cross-Country Variance of IEDFs and Country IEDFs""
Literary Form
non fiction
"December 2006."
Physical Description
1 online resource (30 p.)
Specific Material Designation
Form Of Item

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