January 2019: New VoxEU Column – Banking integration in the EMU: Let’s get real!

Mathias Hoffmann, Egor Maslov, Bent Sørensen, Iryna Stewen 10 January 2019

Bank-to-bank lending in the euro area has increased, direct cross-border lending has not. The column shows that dependence on domestic banks reduces risk-sharing in a crisis, reducing GDP growth in affected country-sectors. Benefits from banking integration are only robust to global shocks if banking integration takes the form of cross-border lending to firms and households.

Link: https://voxeu.org/article/banking-integration-emu-let-s-get-real