Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/122128 
Authors: 
Year of Publication: 
2015
Series/Report no.: 
Graduate Institute of International and Development Studies Working Paper No. HEIDWP05-2015
Publisher: 
Graduate Institute of International and Development Studies, Geneva
Abstract: 
At the forefront of the economic consolidation of the euro area, banking integration came to a stall following the beginning of the 2008 crisis. Since then European banks started retrenching their asset holdings within national borders, effectively reducing the scale of their European operations. This paper explores the link between banking integration and fragmentation in the interest rate channel in the eurozone. Using a rolling VAR, I estimate the overtime evolution of the interest rate pass-through across European countries, and then I relate this evidence to banking integration dynamics. The results support the existence of a statistically significant and negative link between banking integration and cross-country differentials in the interest rate channel.
Subjects: 
monetary policy
banking integration
financial fragmentation
JEL: 
E31
E44
E52
F36
Document Type: 
Working Paper

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