Future directions in international financial integration research - A crowdsourced perspective

Abstract

This paper is the result of a crowdsourced effort to surface perspectives on the present and future direction of international finance. The authors are researchers in financial economics who attended the INFINITI 2017 conference in the University of Valencia in June 2017 and who participated in the crowdsourcing via the Overleaf platform. This paper highlights the actual state of scientific knowledge in a multitude of fields in finance and proposes different directions for future research.

Cryptocurrencies as a financial asset: A systematic analysis

“…While there have been substantial declines in the price of Bitcoin associated with rumours of regulatory imposition, even the widespread banning of cryptocurrencies in some jurisdictions, the easing of such regulatory pressures should theoretically generate substantial price appreciation. Further, the growth of significant episodes of cybercrime continues to undermine confidence and stability in the cryptocurrency market with significant consequences (Gandal et al [2018]; Lucey et al [2018]). However, the presence of inherent pricing bubbles (as found by Cheah and Fry [2015]; Corbet et al [2018a]) generate substantial rewards for those who wish to profit from such illicit tactics as cryptocurrency market hacking and theft.…”

Financial crisis and cointegration of systemic risk in Southeast Asian banking

“…Our cointegration results in ASEAN-5 during financial crises are somehow consistent with the findings of previous studies highlighting that cross-bor- der interbank lending declines in times of crisis, especially during the GFC. As in Lucey et al (2018), cross-border interbank lending around the world generally declines from USD 12 trillion in mid-2008 to USD 7 trillion after the GFC up to 2013 as described in Lucey et al (2018).…”

“…These crises alter intraregional equity investments in the Asia-Pacific region (Kim et al, 2015). Yet, Lucey et al (2018) also suggest that research on financial integration should also take into account the impact of the financial crisis, especially the GFC because of cross-border interbank lending declines following the GFC. To isolate the impact of the two crises in this study, we limit our sample period from 1998 through 2013 before the US Federal Open Market Committee (FOMC) started to taper its QE3 starting in January 2014 (Park, 2013).…”

Financial Integration and Economic Growth: Should Asia Emulate Europe?

“…Another type of integration is institutional, through the adoption of a strict and coordinated exchange rate mechanism, such as the Asian Currency Unit in East Asia and the Exchange Rate Management system in Europe (Pontines 2015). Broadly, financial integration is an integral section in international financial systems, which embodies intricate interactions and co-movements of various financial markets (Lucey et al 2018).…”