With the introduction of the Euro, a single European money market has emerged. Further wholesale financial markets are considered to be highly integrated within the European Union. However, integration in retail financial markets is less advanced. For measuring financial market integration this distinction between wholesale and retail markets becomes crucial. There is a wide literature relating...

This paper presents new evidence on international financial market integration using stock analyst earnings forecasts from 37 countries around the world. By examining cash flow and discount rate news co-movements, we find that the financial and economic aspects of global market integration have diverged over time as financial integration has developed particularly more rapidly than economic int...

It is commonly argued that China’s financial markets are effectively insulated from the rest of the world. To see if this is true and to better understand China’s financial development, we analyze China’s integration with major financial markets. Using conditional copulas, we show that China has experienced an increasing level of integration with several major financial markets during the last ...

International financial integration helps to diversify risk but also may increase the transmission of crises across countries. We provide a quantitative analysis of this trade-off in a two-country general equilibrium model with endogenous portfolio choice and collateral constraints. Collateral constraints bind occasionally, depending upon the state of the economy and levels of inherited debt. T...

The financial trilemma states that financial stability, financial integration and national financial policies are incompatible. Any two of the three objectives can be combined but not all three; one has to give. This paper develops a model to underpin the financial trilemma. Our findings for financial integration suggest that the financial trilemma is in particular at work in Europe. JEL codes:...

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