Financial Integration and Common Payment Systems:

Fragmented payment systems are a major obstacle to financial integration at the regional and international levels. The European Union has launched ambitious policies for the ceation of common payment systems among its country members. Significant results have been achieved in some aspects, but one can say that the European Union is still largely caracterised by fragmented payment systems. This means that one of the basic conditions for financial integration is not fullfilled in the European Union. The purpose of this paper is, in the first place, to present the situation of the different payment systems in the European Union (I), and then, to draw lessons from the European experience for financial integration and payment systems in Asia (II).Financial Integration, payment systems, European Union, Asia

Revenue diversification in emerging market banks: implications for financial performance

Shaped by structural forces of change, banking in emerging markets has recently experienced a decline in its traditional activities, leading banks to diversify into new business strategies. This paper examines whether the observed shift into non-interest based activities improves financial performance. Using a sample of 714 banks across 14 East-Asian and Latin-American countries over the post 1997-crisis changing structure, we find that diversification gains are more than offset by the cost of increased exposure to the non-interest income, specifically by the trading income volatility. But this diversification performance's effect is found to be no linear with risk, and significantly not uniform among banks and across business lines. An implication of these findings is that banking institutions can reap diversification benefits as long as they well-studied it depending on their specific characteristics, competences and risk levels, and as they choose the right niche

The Future of Financial Markets and Regulation: What Strategy for Europe?

This article provides insight into the future of financial markets and regulation in order to define what would be the best strategy for Europe. To preserve financial stability, Europe has to choose between financial opening and independently determining how to regulate finance. Among the five scenarios we defined, three achieve financial stability both inside and outside Europe. In terms of market efficiency, the multi-polar scenario is the best and the fragmentation scenario is the worst, since gains of integration depend on the size of the new capital market. Regarding sovereignty of regulation, fragmentation is the best scenario and the multi-polar scenario is the worst because it necessitates coordination at the global level which implies moving further away from respective national preferences. However, the more realistic option seems to be the regionalisation scenario: (i) this level of coordination seems much more realistic than the global one; (ii) the market should be of sufficient size to enjoy substantial benefits of integration. Nevertheless, the "European government" might gradually increase the degree of financial integration outside Europe in line with the degree of cooperation with the rest of the world.Financial Stability, Supervision and Regulation, Financial Integration

The Future of Financial Markets and Regulation: What Strategy for Europe?

This article provides insight into the future of financial markets and regulation in order to define what would be the best strategy for Europe. To preserve financial stability, Europe has to choose between financial opening and independently determining how to regulate finance. Among the five scenarios we defined, three achieve financial stability both inside and outside Europe. In terms of market efficiency, the multi-polar scenario is the best and the fragmentation scenario is the worst, since gains of integration depend on the size of the new capital market. Regarding sovereignty of regulation, fragmentation is the best scenario and the multi-polar scenario is the worst because it necessitates coordination at the global level which implies moving further away from respective national preferences. However, the more realistic option seems to be the regionalisation scenario: (i) this level of coordination seems much more realistic than the global one; (ii) the market should be of sufficient size to enjoy substantial benefits of integration. Nevertheless, the "European government" might gradually increase the degree of financial integration outside Europe in line with the degree of cooperation with the rest of the world

QUALITÉ DES INSTITUTIONS, LIBÉRALISATION ET CRISES BANCAIRES LE CAS DES PAYS ÉMERGENTS

La récurrence récente des épisodes de crises bancaires dans les pays émergents a suscité une abondante littérature. Les analyses les plus répandues tendent à négliger le rôle des institutions dans l'explication des épisodes d'instabilité financière dans des régions comme l'Amérique Latine et l'Asie. Dans la dynamique des crises, des facteurs d'ordre institutionnel semblent interagir entre eux, ainsi qu'avec les politiques de libéralisation financière. Cet article, en utilisant la base de données du MINEFI, « Profils institutionnels », examine le rôle de la qualité des institutions dans les crises bancaires récentes. L'hypothèse de base est qu'une structure institutionnelle peu développée renforce les mécanismes incitatifs à la prise de risque excessif. Plus précisément, on analyse au moyen d'une modélisation Logit sur un échantillon de 51 pays en coupe transversale en 2001, l'impact de l'environnement réglementaire, public, juridique et politique. L'examen empirique permet de valider une relation économique non triviale entre qualité des institutions et dynamique de crises bancaires systémiques.Institutions, libéralisation financière, crises bancaires systémiques, Logit

Typologie des systèmes financiers des pays émergents et/ou en développement

This paper aims to conduct a comparative analysis of the evolution of financial systems in emerging countries and / or development. This comparative analysis is performed through the use of various techniques namely the principal component analysis and hierarchical clustering on a sample of 52 emerging and / or developing and during the period 1996 to 2009 statistics. The results show a strong heterogeneity of financial systems in terms of depth, efficiency, openness, legal, regulatory and macroeconomic stability. We highlighted also the primacy of institutions in explaining differences economic performance of financial systems

Institutional quality and bank instability: cross-countries evidence in emerging countries

This paper highlights the relevant role of the quality of institutions in maintaining banking stability. Poor institutions constitute the key determinants in explaining the emergence of banking crises. An empirical study of 52 emerging and / or developing countries from 1996 to 2009 finds that banking instability is widely associated with a variety of macroeconomic, financial and ,particularly, institutional factors. Our main conclusion stipulates that the strengthening of institutional quality is an essential condition to ensure banking stability. Political stability, voice and accountability, and respect for the rule and law are relevant institutional characteristics in particular