New Risk Management Study Findings Have Been Reported from Szechenyi Istvan University (Inhomogeneous Financial Markets in a Low Interest Rate Environment-A Cluster Analysis of Eurozone Economies): Insurance – Risk Management

2022 NOV 03 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New study results on risk management have been published. According to news reporting out of Gyor, Hungary, by NewsRx editors, research stated, “In the present paper, we investigate the financial homogeneity of the euro area economies by contrasting eurozone countries’ responses to monetary policy steps to the theoretical assumptions of the liquidity trap phenomenon. Our assumption is that the euro area economies are not completely homogeneous.”

The news reporters obtained a quote from the research from Szechenyi Istvan University: “Hence, in a zero-interest rate environment, the asset holding decisions of economic agents exhibit detectable differences across countries. We verify our assumptions using Eurostat data. We use the financial asset stocks of the euro area countries to cluster the countries concerned. Previous literature has not examined changes in the ratio of financial assets to GDP, nor differences in structural changes in the total stock of financial assets under the zero lower bound. The paper uses k-centers cluster analysis based on Euclidean distance for detecting changes in the portfolio holdings of eurozone economic actors owing to economic crises and monetary policy responses. The results confirm that euro area financial markets are fragmented.”

According to the news editors, the research concluded: “There are significant differences across asset markets of different Eurozone countries, both during and after the crisis. Despite some similarities in the portfolio rearrangement across countries, the ECB’s monetary policy does not have a uniform impact on euro area financial markets, and notable differences prevail in the financial asset structures of the economies concerned.”

For more information on this research see: Inhomogeneous Financial Markets in a Low Interest Rate Environment-A Cluster Analysis of Eurozone Economies. Risks, 2022,10(192):192. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks10100192.

Our news journalists report that more information may be obtained by contacting Tibor Tatay, Department of Economic Analyses, Szechenyi Istvan University, HU9026 Gyor, Hungary. Additional authors for this research include Zsanett Orlovits, Zsuzsanna Novak.

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