Deepening European Financial Integration: Theoretical Considerations and Empirical Evaluation of Growth and Employment Benefits

This paper analyses some long-run macroeconomic effects of European financial integration. In particular we focus on the further reduction and abolition of cross-border barriers impeding the entry into the markets of banking and insurance products. We follow a theoretical as well as an empirical approach to make predictions about how deeper integration will affect growth and unemployment rates. In our growth model we show that enhanced foreign financial market penetration should increase the overall growth rate unambiguously. The empirical analysis includes a wide set of indicators, each of them capturing different aspects of financial development and financial market integration. On the basis of the estimations a weak growth impact of foreign market penetration can be identified. Hence, deeper financial integration generates a growth bonus. But the long-run growth effect is conditional on differences in institutional characteristics captured by country-specific effects. The analysis is supplemented by an analysis of the potential employment benefits of deeper financial integration. We show that the growth bonus can be transformed into an employment bonus, but also not without considering substantial country-specific differences.economic growth; unemployment; European integration

Market Access Strategies in the EU Banking Sector - Obstacles and Benefits towards an integrated European Retail Market

The integration process in the European banking sector considerably differs with regard to product types. Deep integration can be observed in the money market as well as the market for wholesale products. In contrast to that, a strong segmentation of national markets still exists in the field of retail products. In this context, the paper analyses market access strategies of European banks. The analysis is based both on aggregate sectoral data and on four company case studies (BSCH, Nordea Group, BNP Paribas and HSBC). It is explored to which extent different market access strategies contribute to the integration of the European retail markets. A clear result is that mergers and acquisition as well as cooperations and strategic alliances form the most important market access strategies. Direct cross-border sales and the establishment of branches and subsidiaries are of minor importance. All strategies are complicated by considerable natural and politically induced barriers to market access. In particular, such politically induced barriers are different national supervision of banks, different tax legislation, as well as national accounting and take-over principles. Here, further harmonizations are suited to accelerate the integration of European retail markets and thus to increase consumer benefits by lower prices and a higher product variety for financial services.European integration; cross-border banking; mergers and acquisitions

The US dollar, the euro, and the yen: An evaluation of their present and future status as international currencies

The process of European integration and especially the introduction of the euro as the single currency for up to now 12 member countries of the EU in 1999 may alter the existing clear currency hierarchy. The euro area is comparable in size to the US with respect to GDP and even exceeds the US regarding the share in world trade. Thus questions arise of whether the international monetary system turns out to be bipolar in the long run or whether the yen can also play its part. It turns out that real activity, size and sophistication of financial markets, monetary and financial stability and inertia are the most prominent characteristics making a currency to be preferred on a world-wide level. We thus conclude that the integration and the development of European financial markets are of special importance for a stronger international role of the dollar, but that the historical experience of only gradually changing supremacy of international currencies still applies.International currencies; Dollar; Euro

Financial integration within the European Union: Towards a single market for insurance

Our study analyses the extent of integration of the EU market for life and non-life insurance. The main integration indicator used is the market share (premium based) of foreign companies in domestic markets. For the calculation of this indicator, three different kinds of foreign presence are taken into account: foreign presence through merger and acquisitions, through branches and agencies and direct cross-border sales without physical presence. Whereas the static view reveals a high degree of national fragmentation the dynamic view indicates advancing integration. The results also show that integration is even less advanced for life than for non-life insurance and that mergers and acquisitions are the dominant strategy to access a foreign market. Besides summarising the liberalisation history of the European insurance sector and discussing consumer benefits from further integration, the study contributes to a better understanding of obstacles to insurance market integration.European Financial Integration; Insurance Sector; Internal Market

Profitability of Western European banking systems: panel evidence on structural and cyclical determinants

This paper analyses structural and cyclical determinants of banking profitability in 16 Western European countries. We find that financial structure matters, particularly through the beneficial effect of the capital market orientation in the respective national financial system. Furthermore, higher diversification regarding banks' income sources shows a positive effect. The industry concentration of national banking systems, though, does not significantly affect aggregate profitability. Business cycle effects, in particular lagged GDP growth, display a substantial procyclical impact on bank profits. These results are obtained in a single equation panel framework using the Hausman-Taylor instrument variable estimator. The data set comprises aggregate annual country data and banking group data (commercial banks, cooperative banks and savings banks) over the period 1979-2003. --bank profits,financial structure,business cycle

Hybrid Simulators for Product Service-Systems : Innovation potential demonstrated on urban bike mobility

One major goal of the Rethinking Prototyping project is to bring scientists from different domains like engineering and arts to explore collaboratively new approaches of development and testing of Product Service Systems (PSS). PSS combine products, services, and infrastructure to fulfil individual customer needs. Therefore, the development of PSS is an extension of traditional engineering design process, which mainly refers to purely tangible products or intangible services into an integrated development process of products and services. The basis is a new technology called Smart Hybrid Prototyping (SHP), a joint development by Fraunhofer IPK and the TU Berlin. SHP is an innovative technology for a multimodal interdisciplinary evaluation of virtual prototypes in early development stages. It is based upon methods of Mixed Reality extended by modern industrial technologies to allow natural interaction with virtual prototypes of mechanical or mechatronic systems. It serves as a bridge between physical reality and digital virtuality. The use cases in this paper are based on urban bike mobility. Therefore, three concepts have been worked out to specify main requirements for an urban hybrid bike simulator. The first use case is from the perspective of a bicycle rental, where rental services for the users can be developed, validated, and optimized. The second use case provides the integration of mobile devices like smartphones and tablets for the development and validation of mobile services for bicyclists. The third use case is oriented on development and validation of new bicycles and urban mobility concepts like e-bikes, pedelecs, tripelecs and sharing services. Based on these generic use cases the requirements on a hybrid bicycle simulator were derived. Why a bicycle simulator? Well, we are firmly convinced that the future of urban mobility is determined from trends such as ecological rethinking and the desire for sports and healthy life. Furthermore, it is one of the most competitive and agile markets using most innovative materials and manufacturing technologies

Theoretical concepts for the process of European integration: A current overview

This article provides an overview of major theoretical concepts behind the process of European economic integration. At first, the classic theory of customs unions as formulated by Viner, Meade and others is explained taking also into account factor mobility in a customs union in the move towards a common market. The second part deals with the seminal contributions to monetary integration: the theory of optimum currency areas (OCA) referring to the work of Kenen, Mundell and McKinnon. Advanced approaches of OCA in the form of a broader cost-benefit-analysis in the context of political steps towards a monetary union in Europe and the potential for endogeneity of the OCA criteria are also discussed. Considerations on political economy aspects and fiscal federalism conclude the article.economic integration; monetary integration; European Union

Einfluss der regionalen Sympathikolyse mittels Periduralanästhesie auf die Mikrozirkulation der Leber unter physiologischen und pathophysiologischen Bedingungen im tierexperimentellen Modell

Untersucht wurde der Einfluss der regionalen Sympathikolyse mittels Periduralanästhesie auf mikrozirkulatorische Parameter der Leber unter physiologischen und pathophysiologischen Bedingungen (hämorrhagischer Schock (HS)) und der damit verbundene Einfluss auf die Leberzellintegrität im Rattenmodell. Unter physiologischen Bedingungen kommt es zu keiner Änderung der Mikrohämodynamik. Die unter den Bedingungen des HS mit anschließender Reperfusion ausgeprägten Einschränkungen der Mikrozirkulation werden unter regionaler Sympathikolyse deutlich reduziert