Convergence of Financial Structures in Europe: An Application of Factorial Matrix Analysis

Financial Accounts: History, Methods, the Case of Italy & International Comparisons Conference, p. 365, 2005

27 Pages Posted: 12 Oct 2012

Date Written: December 1, 2005

Abstract

This paper provides a quantitative assessment of whether or not the financial structures of Europe have converged in the wake of the institution of the Economic and Monetary Union and of the euro area. Starting with a broad selection of financial indicators, multidimensional data analysis techniques are used to derive a small set of composite indicators, synthesizing the evolution of national financial structures over time. Three main indicators are obtained, summarizing respectively the overall level of financial deepening, the relative weight of the banking sector and the influence of the government borrowing requirement. In general, albeit allowing for the limitations due to the shortness of the time period considered, the hypothesis of a progressive convergence of the structure of the financial systems of the EU countries appears to be broadly in line with the empirical evidence documented in the paper.

Suggested Citation

Di Giacinto, Valter and Esposito, Luciano, Convergence of Financial Structures in Europe: An Application of Factorial Matrix Analysis (December 1, 2005). Financial Accounts: History, Methods, the Case of Italy & International Comparisons Conference, p. 365, 2005. Available at SSRN: https://ssrn.com/abstract=2160439 or http://dx.doi.org/10.2139/ssrn.2160439

Valter Di Giacinto (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Luciano Esposito

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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