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http://hdl.handle.net/10419/19770
  

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dc.contributor.authorHartmann, Philippen_US
dc.contributor.authorGrüner, Hans Peteren_US
dc.contributor.authorFecht, Falkoen_US
dc.coverage.temporal1997-2004en_US
dc.date.accessioned2009-01-28T16:05:37Z-
dc.date.available2009-01-28T16:05:37Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/19770-
dc.description.abstractThis paper compares four forms of inter-regional financial risk sharing: (i) segmentation, (ii) integration trough the secured interbank market, (iii) integration trough the unsecured interbank market, (iv) integration of retail markets. The secured interbank market is an optimal risk-sharing device when banks report liquidity needs truthfully. It allows diversification without the risk of cross-regional financial contagion. However, free-riding on the liquidity provision in this market restrains the achievable risk-sharing as the number of integrated regions increases. In too large an area this moral hazard problem becomes so severe that either unsecured interbank lending or, ultimately, the penetration of retail markets is preferable. Even though this deeper financial integration entails the risk of contagion it may be beneficial for large economic areas, because it can implement an efficient sharing of idiosyncratic regional shocks. Therefore, the enlargement of a monetary union, for example, extending the common interbank market might increase the benefits of also integrating retail banking markets through cross-border transactions or bank mergers.en_US
dc.language.isoengen_US
dc.relation.ispartofseriesDiscussion Paper, Series 2: Banking and Financial Supervision 2007,11en_US
dc.subject.jelD61en_US
dc.subject.jelG10en_US
dc.subject.jelE44en_US
dc.subject.jelG21en_US
dc.subject.ddc330en_US
dc.subject.keywordFinancial integrationen_US
dc.subject.keywordinterbank marketen_US
dc.subject.keywordcross border lendingen_US
dc.subject.keywordfinancial contagionen_US
dc.subject.stwFinanzmarkten_US
dc.subject.stwMarktintegrationen_US
dc.subject.stwBankensystemen_US
dc.subject.stwFusionen_US
dc.subject.stwRisikomanagementen_US
dc.subject.stwWohlfahrtseffekten_US
dc.subject.stwEU-Staatenen_US
dc.subject.stwSchweizen_US
dc.subject.stwUSAen_US
dc.titleWelfare effects of financial integrationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn543436683en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:bubdp2:6154-
Appears in Collections:Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank

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