Financial integration: Crisis and economic development

Abstract

Financial integration is an inseparable part of economic integration. It affects capital movement and economic development. Certain studies have shown that financial integration is beneficial to the economy. However, integration may be slowed down by occurrence of a crisis. Over the past 10 years, several crises have been underway. They have affected both economic development and financial integration. The aim of the chapter is to present theoretically the relation between financial integration, crisis, and economic development. An overview of EU and SEE financial integration and economic development is given. Development and integration of both regions have been slowed down due to the global and EU crisis, but there has been an improvement over the past few years. The fact is that SEE countries do not have a very developed financial integration but they meet certain prerequisites to reach a higher level of integration.