Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/153655 
Title: 

Financial regulation, financial globalization and the synchronization of economic activity

The document was removed on behalf of the author(s)/ the editor(s).

Year of Publication: 
2010
Series/Report no.: 
ECB Working Paper No. 1221
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We identify the effect of financial integration on international business cycle synchronization, by utilizing a confidential database on banks’ bilateral exposure and employing a country-pair panel instrumental variables approach. Countries that become more integrated over time have less synchronized growth patterns, conditional on global shocks and country-pair factors. To account for reverse causality and measurement error, we exploit variation in the transposition dates of financial legislation. We find that increases in financial integration stemming from regulatory harmonization policies are followed by more divergent cycles. Our results contrast with those of the previous studies which suffer from the standard identification problems.
Subjects: 
banking integration
Co-movement
Financial Legislation
Fluctuations
JEL: 
E32
F15
F36
G21
G28
O16
Document Type: 
Working Paper

Files in This Item:
The document was removed on behalf of the author(s)/ the editor(s) on: May 6, 2020


Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.