ABSTRACT
This chapter studies the convergence of banking indicators in the Mediterranean economies, an area including 19 European, Asian and African countries. We compare banking convergence, measured by the ratios of deposits and loans to GDP, with convergence of per capita income, using 20 European Union countries as control sample. We assembled a large dataset starting from the Sixties. The econometric exercises apply the concepts of beta, sigma convergence and stationarity tests. We also tried to detect the existence of convergence clubs, i.e. subsets of countries that are more similar than the Mediterranean nations as a whole. We obtained three main results. First, in the Mediterranean countries some convergence of banking indicators exists, mainly for deposits, but it is weaker than in the EU countries. Second, per capita income convergence did not take place in the Mediterranean area, while there is evidence of it in the EU countries. Third, splitting the Mediterranean area into smaller sets of countries, we found real convergence for the clubs of African and Arab countries, while banking convergence was confirmed for European nations.
