Financial Integration and Liquidity Crises
研究了金融一体化如何影响银行体系稳定性，发现一体化在正常时期稳定利率，但在系统性冲击时加剧利率飙升，并讨论了监管含义。
This paper analyzes the effects of financial integration on the stability of the banking system. Financial integration allows banks in different regions to smooth local liquidity shocks by borrowing and lending on a world interbank market. We show under which conditions financial integration induces banks to reduce their liquidity holdings and to shift their portfolios toward more profitable but less liquid investments. Integration helps reallocate liquidity when different banks are hit by uncorrelated shocks. However, when a correlated (systemic) shock hits, the total liquid resources in the banking system are lower than in autarky. Therefore, financial integration leads to more stable interbank interest rates in normal times but to larger interest rate spikes in crises. These results hold in a setup in which financial integration is welfare improving from an ex ante point of view. We also look at the model’s implications for financial regulation and show that, in a second-best world, financial integration can increase the welfare benefits of liquidity requirements. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2841 . This paper was accepted by Neng Wang, finance.