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Volatility of Cross-Border Financial Flows and Policy Responses.

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Názov: Volatility of Cross-Border Financial Flows and Policy Responses.
Autori: CLICHICI, DORINA, IORDACHI, VICTORIA
Zdroj: Global Economic Observer; 2017, Vol. 5 Issue 1, p118-126, 9p
Predmety: EUROPEAN economic integration, MARKET volatility, GLOBAL Financial Crisis, 2008-2009
Abstrakt: The last global financial crisis has shown that the volatility of financial flows has adverse impacts on growth prospects and has an important role from a financial stability perspective. The article has the purpose to analyze why Europe was the most affected region by a reversal and a heightened volatility of cross-border flows both during the global financial crisis and in the aftermath of it, and to identify the main policy responses to this issue at the international and European level. For achieving these purposes the authors review the benefits and the costs of financial integration and present the main characteristics of cross-border capital flows with destabilizing effects on financial markets. The analysis finds that significant progress related to managing the volatility of financial flows through regulatory and supervisory reform of the financial market have been made since 2008, both at the international and European level. However, further steps should be taken for enhancing cross-border cooperation at the global level in order to effectively use the limited implementation resources. For preserving the financial stability in Europe further actions should be implemented to address the existing weaknesses related to adverse incentives or moral hazard risks by a deeper financial and fiscal integration. [ABSTRACT FROM AUTHOR]
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Databáza: Complementary Index
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Abstrakt:The last global financial crisis has shown that the volatility of financial flows has adverse impacts on growth prospects and has an important role from a financial stability perspective. The article has the purpose to analyze why Europe was the most affected region by a reversal and a heightened volatility of cross-border flows both during the global financial crisis and in the aftermath of it, and to identify the main policy responses to this issue at the international and European level. For achieving these purposes the authors review the benefits and the costs of financial integration and present the main characteristics of cross-border capital flows with destabilizing effects on financial markets. The analysis finds that significant progress related to managing the volatility of financial flows through regulatory and supervisory reform of the financial market have been made since 2008, both at the international and European level. However, further steps should be taken for enhancing cross-border cooperation at the global level in order to effectively use the limited implementation resources. For preserving the financial stability in Europe further actions should be implemented to address the existing weaknesses related to adverse incentives or moral hazard risks by a deeper financial and fiscal integration. [ABSTRACT FROM AUTHOR]
ISSN:23439742