Buti, Marco, Leandro, José, Nikolov, Plamen, (2016), “Smoothing economic shocks in the Eurozone: The untapped potential of the financial union”, Voxeu, 25 Αugust
The fragmentation of financial systems along national borders was one of the main handicaps of the Eurozone both prior to and in the initial phase of the crisis, hindering the shock absorption capacity of individual member states. The EU has taken important steps towards the deeper integration of Eurozone financial markets, but this remains incomplete. This column argues that a fully-fledged financial union can be an efficient economic shock absorber. Compared to the US, there is significant potential in terms of private cross-border risk sharing through the financial channel, more so than through fiscal (i.e. public) means.
Relevant Posts
- Staehr, Karsten, Vermeulen, Robert, (2016), “How competitiveness shocks affect macroeconomic performance across euro area countries “, European Central Bank, Working Paper Series 1940, July
- Jones, Erik, Torres, Francisco, (2016), “Governance of the European Monetary Union: Recasting Political, Fiscal and Financial Integration”, Routledge, 7 June