Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121038
Authors: 
Pasricha, Gurnain Kaur
Year of Publication: 
2009
Series/Report no.: 
FIW Working Paper 37
Abstract: 
In the debate on the benefits of international financial integration, recent literature has emphasized the development of domestic markets as a precondition. This paper offers an alternative view. Lack of competition in domestic financial systems may prevent countries from reaping the benefits of international integration simply because it prevents them from being integrated in a meaningful way - that of price equalization. A new index of de-facto financial integration is used to explore this question and confirms a strong link. The level of de-jure controls, volatility and institutions matter for price integration but their importance differs between developed and developing countries.
Subjects: 
Financial Integration Index
Covered Interest Parity
Threshold Autoregressive Models
Bank Competitiveness
JEL: 
F32
G15
G21
Document Type: 
Working Paper

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