House Price Synchronicity, Banking Integration, and Global Financial Conditions

House Price Indexes and the Global Financial Crisis

Why is this topic of house price indexes important? The Global Financial Crisis has several causes but a main cause was a housing bubble in the U.S. which led banks to make mortgage loans that were based on the assumption that house prices were not rising unusually quickly. If accurate regional house price indexes for the U.S. would have been widely available to the public, it is unlikely that ...

Integration of European Banking and Financial Markets

This paper investigates banking and capital market developments in Europe and the moves towards the creation of a single financial services market. A critical element in the integration process is the success of the EU's Financial Services Action Plan (FSAP). This seeks to introduce a wide range of legislation aimed at reducing barriers and promoting cross-border trade in financial services esp...

What determines bank stock price synchronicity? Global evidence

This paper examines what institutional and bank-specific factors determine bank stock price synchronicity. Using data on 37 countries from 1996-2007, we find that bank stocks are more aligned with the whole market (1) during the financial crisis; (2) in countries that have more credit provided by banks; (3) in countries that do not have explicit depository insurance; and (4) in countries that h...

Price and Financial Stability in Modern Central Banking

Price Stability with Imperfect Financial Integration∗

This paper evaluates the welfare implications of monetary policy rules when international financial markets are incomplete. Using a two-country dynamic general equilibrium monetary model, we evaluate the magnitude of the costs of imperfect risk sharing. Under a price stability policy in both countries, they are in the range of 0.07-0.70 percent of a permanent shift in steady-state consumption. ...