Financial integration and structure in EMU during the corona crisis

Philipp Hartmann, Stefano Borgioli, Alina Kempf, Philippe Molitor, Francesco Paolo Mongelli 28 May 2021

Financial integration and the structure of financial markets and intermediaries are two key elements for the functioning of the European Economic and Monetary Union (EMU). For example, they influence the extent to which the risks from asymmetric shocks can be shared and how the single monetary policy is transmitted across member countries. The massive economic dislocations that the coronavirus (COVID-19) pandemic caused in production, trade, investment, employment and consumption also showed in financial systems. Financial stability risks from the pandemic have been addressed elsewhere (De Guindos 2020, ECB 2021, ESRB 2021, European Commission 2021b). In this column, we look at high- and low-frequency indicators of financial integration and structure and discuss how they responded to the…

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