IMF Working Papers

Regional Financial Interlinkages and Financial Contagion within Europe

By Inci Ötker, Karl Driessen, Zsofia Arvai

January 1, 2009

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Inci Ötker, Karl Driessen, and Zsofia Arvai. Regional Financial Interlinkages and Financial Contagion within Europe, (USA: International Monetary Fund, 2009) accessed October 4, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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

Publication Details

  • Pages:

    52

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2009/006

  • Stock No:

    WPIEA2009006

  • ISBN:

    9781451871531

  • ISSN:

    1018-5941