Deepening the cross-border integration of the European Union’s capital markets will increase the bloc’s ability to deal with financial risk, a working paper published by the Banque de France says.

In Risk sharing in Europe: new empirical evidence on the capital markets channel, Gilles Dufrénot, Jean-Baptiste Gossé and Caroline Clerc propose a new methodology to estimate the degree of financial risk-sharing in the EU.

The authors use data on a panel of European countries to compare the years