## Figure 1.16. Channels of Contagion in the Sovereign–Financial Sector Nexus

## Source details

**Canonical URL:** [Figure 1.16. Channels of Contagion in the Sovereign–Financial Sector Nexus](https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-16.pdf)

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### Macro-financial channels
- 1. Mark-to-market loss on sovereign bond holdings
- 2. Mark-to-market loss on sovereign bond holdings
- 3. Higher bank funding costs
- 4. Economic slowdown
- 5. Higher interest rates on loans
- 6. Higher nonperforming loans
- 7. Mark-to-market loss on corporate bond holdings

### Financial channels
- 8. Mark-to-market loss on bank bond holdings
- 9. Higher contingent liabilities (bailout)
- 10. Lower tax revenues
- 11. Lower demand for sovereign bonds
- 12. Lower demand for sovereign bonds

### Bond demand channels
- 13. Lower demand for bank bonds
- 14. Lower demand for corporate bonds

*Source: IMF staff.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-16.pdf_