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International Banking: the Isolation of the Euro Area

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  • Delatte, Anne-Laure
  • Bouvatier, Vincent

Abstract

We assess the evolution of international banking integration at the light of gravity equations on banks? bilateral consolidated foreign claims data. Our estimates on a panel of 14 reporting countries and their 186 partners between 1999 and 2012 reveal: 1) the forward march of banking integration has reversed only as far as euro area countries are concerned as source or destination countries. 2) Euro area banks have reduced their international exposure inside and outside the euro area to a similar extent. 3) This decline is not a correction of previous overshooting but a marked desintegration. 4) In the rest of the world, the banking integration has strengthened since the financial crisis.

Suggested Citation

  • Delatte, Anne-Laure & Bouvatier, Vincent, 2014. "International Banking: the Isolation of the Euro Area," CEPR Discussion Papers 10264, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10264
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    3. Xavier Timbeau, 2015. "A diverging Europe on the edge. The independent Annual Growth Survey 2015," SciencePo Working papers Main hal-03620048, HAL.
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    More about this item

    Keywords

    International banking; Gravity model; Banking integration;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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