This paper analyses some long-run macroeconomic effects of European financial integration. In particular we focus on the further reduction and abolition of crossborder barriers impeding the entry into the markets of banking and insurance products. We follow a theoretical as well as an empirical...

This paper studies the interaction of international shadow banking with monetary and macroprudential policy in a two-country currency union DSGE model. We find evidence that cross-country financial integration through the shadow banking system is a source of financial contagion in response to...