%0 Journal Article
%T Assessing the Potential Strength of a Bank Capital Channel in Europe: A Principal Component Analysis
%A CRISTINA BADARAU-SEMENESCU
%A GREGORY LEVIEUGE
%J Review of Finance and Banking
%D 2010
%I Bucharest Academy of Economic Studies
%X The asymmetric impact of the recent financial crisis on the European countriesĄ¯real activity raised the question of the heterogeneity of the transmission channels of shocksin the euro area. In this article, we suggest an assessment of this heterogeneity based onthe banksĄ¯ capital channel (BCC). To this end, we follow an original and global perspective,studying the combination of several key indicators through a Principal Component Analysis(PCA). Based on data collected before the beginning of the crisis, the analysis identifiesGermany and Italy as the European economies a priori the most exposed to a financial shockpassing through the BCC, while Finland, France or Spain would be the least exposed. Thecomparison of these a priori results to the post-crisis economic performance of the largestEuropean countries supports the idea of a heterogeneous bank capital channel inside theunion.1
%U http://www.rfb.ase.ro/articole/A1-Semenescu.pdf