International Banking: The Isolation of the Euro Area

34 Pages Posted: 24 Nov 2014

See all articles by Vincent Bouvatier

Vincent Bouvatier

University Paris-Est Créteil (UPEC) - ERUDITE

Anne-Laure Delatte


Date Written: November 2014


We assess the evolution of international banking integration at the light of gravity equations on banks' bilateral consolidated foreign claims data. Our estimates on a panel of 14 reporting countries and their 186 partners between 1999 and 2012 reveal: 1) the forward march of banking integration has reversed only as far as euro area countries are concerned as source or destination countries. 2) Euro area banks have reduced their international exposure inside and outside the euro area to a similar extent. 3) This decline is not a correction of previous overshooting but a marked desintegration. 4) In the rest of the world, the banking integration has strengthened since the financial crisis.

Keywords: banking integration, gravity model, international banking

JEL Classification: F34, F36

Suggested Citation

Bouvatier, Vincent and Delatte, Anne-Laure, International Banking: The Isolation of the Euro Area (November 2014). CEPR Discussion Paper No. DP10264, Available at SSRN:

Vincent Bouvatier (Contact Author)

University Paris-Est Créteil (UPEC) - ERUDITE ( email )

Mail des Mèches
61 avenue du Général de Gaulle
Créteil Cedex, 94010

Anne-Laure Delatte

CNRS ( email )

3, rue Michel-Ange
Paris, 75794

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