Post by Sapphire Capital on Jul 14, 2008 20:23:19 GMT 4
What are Borders Made Of? An Analysis of Barriers to European Banking Integration
MASSIMILIANO AFFINITO
Bank of Italy
GIANMATTEO PIAZZA
Bank of Italy
--------------------------------------------------------------------------------
April 30, 2008
Bank of Italy Temi di Discussione (Working Paper) No. 666
Abstract:
Linguistic and cultural differences, different legal and supervisory frameworks, and relationship lending have been repeatedly mentioned as barriers to European retail banking integration. We investigate whether these barriers have affected integration within national boundaries, using an index of localism of regional banking systems as a measure of market integration. If local banks are established and flourish because asymmetric information makes entry difficult for non-incumbents (Dell'Ariccia, 2001) or regulatory and governance rules prevent entry from outside (Berger et al., 1995), we should find a significant relationship between indicators of these barriers and measures of the localism of banking systems. Our results show that this is indeed the case for asymmetric information, while findings are more blurred for supervisory practices.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1151682_code606534.pdf?abstractid=1151682&mirid=1
MASSIMILIANO AFFINITO
Bank of Italy
GIANMATTEO PIAZZA
Bank of Italy
--------------------------------------------------------------------------------
April 30, 2008
Bank of Italy Temi di Discussione (Working Paper) No. 666
Abstract:
Linguistic and cultural differences, different legal and supervisory frameworks, and relationship lending have been repeatedly mentioned as barriers to European retail banking integration. We investigate whether these barriers have affected integration within national boundaries, using an index of localism of regional banking systems as a measure of market integration. If local banks are established and flourish because asymmetric information makes entry difficult for non-incumbents (Dell'Ariccia, 2001) or regulatory and governance rules prevent entry from outside (Berger et al., 1995), we should find a significant relationship between indicators of these barriers and measures of the localism of banking systems. Our results show that this is indeed the case for asymmetric information, while findings are more blurred for supervisory practices.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1151682_code606534.pdf?abstractid=1151682&mirid=1