Regional Financial Interlinkages and Financial Contagion within Europe
January 1, 2009
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Summary
This paper focuses on financial interlinkages within Europe and potential contagion channeled through these interlinkages. It discusses the increased role of external financing as a source of funding for credit growth; analyzes potential channels of contagion through financial linkages; and assesses the magnitude of cross-border exposures between emerging and western European countries. Based on the stylized facts on these exposures, the paper provides simple indices of exposure to regional contagion that could help identify the likely pressure points and capture potential spillover effects and propagation channels of a regional shock originating from a given country.
Subject: Banking, Commercial banks, Credit, Financial contagion, Financial institutions, Financial sector policy and analysis, Foreign banks, Foreign currency exposure, Money
Keywords: Austria, Baltics, bank, Central, CESE bank, CESE country, CESE economy, Commercial banks, common lender, contagion, Credit, credit growth, Eastern, emerging markets, Europe, Financial contagion, Financial linkages, Foreign banks, Foreign currency exposure, funding exposure, lender, parent bank, Southeastern Europe, spillover effects, Western Europe, WP
Pages:
52
Volume:
2009
DOI:
Issue:
006
Series:
Working Paper No. 2009/006
Stock No:
WPIEA2009006
ISBN:
9781451871531
ISSN:
1018-5941
