Eric Dor, Director of Economic Studies at IESEG School of Management, Paris, pinged me with his latest post: Financial Fragmentation of the Euro Area is the Main Challenge for the ECB.

This is a guest post, but an incomplete one. You can download the full report at the above link. What follows is from Eric Dor.

Diverging Patterns of the Flows of Funds Between the Center and the Periphery of the Euro Area

Since the start of the financial crisis, funds have had a tendency to migrate from peripheral countries to center countries. These financial flows have been caused by various factors, including a general distrust of the banking systems of peripheral countries or the famous redenomination risk.