The Euro and Cross-Border Banking: Evidence from Bilateral Data

Blank, Sven; Buch, Claudia M.

doi:10.1057/palgrave.ces.8100218

Cited by 36 publications

(42 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Previous studies have investigated the effect of the EMU on a whole range of economic indicators, such as trade (Baldwin, 2006;Baldwin et al, 2008;Bun and Klaassen, 2007;Micco et al, 2003), foreign direct investment (De Sousa and Lochard, 2011;Petroulas, 2007), cross-border banking (Blank and Buch, 2007;Coeurdacier and Martin, 2009;Spiegel, 2009), real exchange rates (El-Shagi et al, 2016), GDP per capita (Fernández and Perea, 2015), and wage growth and unemployment (Grüner, 2010;Mikosch and Sturm, 2012). Mongelli and Vega (2006) provide an overview of the early literature on the effects of the EMU on economic performance, financial structures and product and labor market institutions.…”

Section: Literature Review: the Emu And Current Account Balancesmentioning

confidence: 99%

Estimating the effect of the EMU on current account balances: A synthetic control approach

Hope

2016

European Journal of Political Economy

View full text Add to dashboard Cite

The European sovereign debt crisis wrought major political and economic damage on the European Monetary Union (EMU). This led to a reassessment of the pre-crisis period of economic growth and stability in the EMU, shifting attention to the macroeconomic imbalances that emerged between member states, especially those in current account balances. This paper uses macroeconomic data on OECD economies and a new statistical approach for causal inference in observational studies-the synthetic control method-to estimate the effect of the EMU on the current account balances of individual member states. This 'counterfactuals' approach provides strong evidence that the introduction of the EMU was responsible for the divergence in current account balances among member states in the run-up to the euro crisis. The results suggest that the EMU effect operated through multiple channels and that fundamental changes to the institutional framework of the EMU may be required to safeguard the currency union against a reemergence of dangerous external imbalances in the future.

show abstract

Section: Literature Review: the Emu And Current Account Balancesmentioning

confidence: 99%

Estimating the effect of the EMU on current account balances: A synthetic control approach

Hope

2016

European Journal of Political Economy

View full text Add to dashboard Cite

show abstract

“…In particular, holdings of euro area debt instruments as of end-2009 should not have been affected by the looming euro area crisis yet. And given the restriction to the annual frequency of 4 Alternatively, a number of papers have used data on bilateral bank exposures obtained from the Bank for International Settlements (see Blank and Buch, 2007;Kalemli-Ozcan et al, 2010;Coeurdacier and Martin, 2009;Spiegel, 2009a,b).…”

Section: The Cpis Datamentioning

confidence: 99%

“…3 While Galstyan and Lane (2013) are concerned with the patterns of global portfolio capital flows during the global financial crisis, we focus on portfolio capital flows involving the euro area during the sovereign debt crisis. Second, our paper is related to the literature studying the effect of Economic and Monetary Union (EMU) on financial integration across countries within the euro area (see Lane, 2006;De Santis and Gérard, 2006;Blank and Buch, 2007;Spiegel, 2009b). While we adopt the same empirical approach, our paper is concerned with examining the nature of financial integration within the euro area and with the rest of the world by distinguishing between stressed and non-stressed euro area countries; moreover, we focus on the time period during the sovereign debt crisis rather than the early period of EMU.…”

Section: Introductionmentioning

confidence: 99%

The geography of the great rebalancing in euro area bond markets during the sovereign debt crisis

Beck

Georgiadis

Gräb

2016

Journal of Empirical Finance

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. During the sovereign debt crisis investors rebalanced out of stressed and into nonstressed euro area countries, thereby contributing to the tensions in euro area financial markets. This paper examines the geographical pattern of this great rebalancing. Specifically, we test whether euro area and non-euro area investors adjusted their holdings of debt securities of euro area stressed and non-stressed countries disproportionately relative to benchmarks derived from a standard gravity model for portfolio choice. We find that non-euro area investors under-invested in stressed euro area countries, but did not over-invest in non-stressed euro area countries. As regards intra-euro area flows, we do not find evidence for a disproportionate slowdown of capital flows from non-stressed into stressed euro area countries. Instead, our results suggest that investors in stressed euro area countries disproportionately shifted capital into debt securities of non-stressed euro area countries. Finally, we find that both non-euro area investors' under-investment in stressed countries and stressed euro area investors' over-investment in non-stressed euro area countries ceased after the announcement of the ECB's OMT programme. Terms of use: Documents in

show abstract

“…They nd that after the introduction of the single currency an increased number of mostly non-nancial rms issued euro denominated securities. 3 A notable exception is the study by Blank and Buch (2007), who also also report "within" estimates controlling for country-pair xed-e ects. However their study does not aim to identify the underlying channels of the euro's positive impact on cross-border investment, which is the main question we pursue in this paper.…”

Section: Introductionmentioning

confidence: 99%

What Lies Beneath the Euro's Effect on Financial Integration: Currency Risk, Legal Harmonization, or Trade?

Kalemli‐Özcan¹,

Papaioannou²,

Peydró³

2009

View full text Add to dashboard Cite

show abstract

The Euro and Cross-Border Banking: Evidence from Bilateral Data

Cited by 36 publications

References 14 publications

Estimating the effect of the EMU on current account balances: A synthetic control approach

Estimating the effect of the EMU on current account balances: A synthetic control approach

The geography of the great rebalancing in euro area bond markets during the sovereign debt crisis

What Lies Beneath the Euro's Effect on Financial Integration: Currency Risk, Legal Harmonization, or Trade?

Contact Info

Product

Resources

About