Global Trends and Key Factors for Financial Stability in European Union

Globalization is defined as the process of creating a single financial market, which requires the implementation of unique regulations across countries. It is also very well accepted the argument that, globalization is targeting the integration of national financial markets into a single global market. Recent research conducted across eight decades, indicated that Globalization is one of the main trends in the academic research. Moreover, countries’ financial systems and the creation of Euromarkets are key components in the process of globalization. Following such rationale, this study undertakes a holistic analysis into globalization, and the global factors impending on the financial stability in general, and European Union in particular. This is a theoretical study, which designs a theoretical framework with factors affecting the regional and global financial stability. The aim of the research is to provide a holistic perspective upon the impact of globalization and the factors impending on the European Union’s financial stability. The objectives of this study are: (1) To offer an evolving and holistic view on the globalization and Euro area; (2) To analyse theoretically possible factors affecting regional financial stability; (3) To design a Conceptual Research Framework which can be further developed, and to formulate hypotheses. This is a theoretical study based on systematic literature review conducted along eight decades on articles from high rank journals, and an unsystematic literature review into relevant journal articles. The findings suggest that globalization has a crucial role in the financial stability in Europe. However, there is a multiple factor impact determined by globalization and linked to globalization. Between these factors, the authors can enumerate the process of integration, inequalities, and crises. The research is a contribution to theory, through the creation of a theoretical framework. In addition, by raising an awareness of the key factors that influence upon the financial stability in Europe and across the world, the study is a contribution to practice. Keywords: globalization; financial systems; stability; regulations.JEL Classification: F01, G10, G01, P1, G18