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European financial integration during the COVID-19 crisis

Author

Listed:
  • Borgioli, Stefano
  • Horn, Carl-Wolfram
  • Kochanska, Urszula
  • Molitor, Philippe
  • Mongelli, Francesco Paolo

Abstract

This article provides an overview of financial fragmentation during the coronavirus (COVID-19) crisis and the policies enacted to counter its effects. It does so through the lens of a set of high-frequency indicators for monitoring developments in financial integration. The readings from these indicators are then linked to unfolding economic and political events and to the main policy responses in monetary, fiscal and financial stability policy at the national and European levels. After initial sharp fragmentation, euro area financial integration broadly recovered to pre-crisis levels by mid-September, but not for all indicators. However, this recovery is still fragile and relies on an unprecedented amount of fiscal, monetary and prudential policy support. JEL Classification: G00, F36

Suggested Citation

  • Borgioli, Stefano & Horn, Carl-Wolfram & Kochanska, Urszula & Molitor, Philippe & Mongelli, Francesco Paolo, 2020. "European financial integration during the COVID-19 crisis," Economic Bulletin Articles, European Central Bank, vol. 7.
    • Handle: RePEc:ecb:ecbart:2020:0007:2
    Note: 339024
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    File URL: https://www.ecb.europa.eu//press/economic-bulletin/articles/2020/html/ecb.ebart202007_02~b27e8089c5.en.html
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    Citations

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    Cited by:

    1. Candelon, Bertrand & Luisi, Angelo & Roccazzella, Francesco, 2022. "Fragmentation in the European Monetary Union: Is it really over?," Journal of International Money and Finance, Elsevier, vol. 122(C).
    2. Hobelsberger, Karin & Kok, Christoffer & Mongelli, Francesco Paolo, 2022. "A tale of three crises: synergies between ECB tasks," Occasional Paper Series 305, European Central Bank.
    3. Stefan Goldbach & Volker Nitsch, 2022. "Covid-19 and Capital Flows: The Responses of Investors to the Responses of Governments," Open Economies Review, Springer, vol. 33(4), pages 751-774, September.
    4. Patel, Ritesh & Goodell, John W. & Oriani, Marco Ercole & Paltrinieri, Andrea & Yarovaya, Larisa, 2022. "A bibliometric review of financial market integration literature," International Review of Financial Analysis, Elsevier, vol. 80(C).
    5. Dragomirescu-Gaina, Catalin & Philippas, Dionisis, 2022. "Local versus global factors weighing on stock market returns during the COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 46(PA).
    6. Ștefan Cristian Gherghina & Daniel Ștefan Armeanu & Camelia Cătălina Joldeș, 2021. "COVID-19 Pandemic and Romanian Stock Market Volatility: A GARCH Approach," JRFM, MDPI, vol. 14(8), pages 1-29, July.
    7. Borgioli, Stefano & Kochanska, Urszula & Mongelli, Francesco Paolo & Zito, Alessandro, 2023. "A novel high‐frequency indicator of financial integration for monitoring the impact of COVID-19," Statistics Paper Series 43, European Central Bank.

    More about this item

    Keywords

    COVID-19 crisis; euro area; Financial integration;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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