## Crisis Transmission in the Global Banking Network

_IMF Working Papers, April 12, 2016_

## Source details

**Canonical URL:** [Crisis Transmission in the Global Banking Network](https://www.imf.org/en/publications/wp/issues/2016/12/31/crisis-transmission-in-the-global-banking-network-43865)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/crisis-transmission-in-the-global-banking-network-43865/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/crisis-transmission-in-the-global-banking-network-43865/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/crisis-transmission-in-the-global-banking-network-43865/bundle-manifest.json)

## Bibliographic details
- Authors: Galina Hale, Tümer Kapan, Camelia Minoiu
- Published: April 12, 2016
- Series: IMF Working Papers

---

### Overview and metadata
- Title: Crisis Transmission in the Global Banking Network
- Authors: Galina Hale, Tümer Kapan, Camelia Minoiu
- Date: April 12, 2016
- Series: Working Paper No. 2016/091
- Issue: 091
- Volume: 2016
- Pages: 38
- ISBN: 9781475551341
- ISSN: 1018-5941

### Research question and data
- Objective: Study the transmission of financial sector shocks across borders through international bank connections.
- Data:
  - long-term interbank loans among more than 6,000 banks
  - sample period: 1997-2012
  - constructed a yearly global network of interbank exposures

### Methodology
- Exposure types analyzed:
  - direct (first-degree) exposures
  - indirect (second-degree) exposures
- Outcomes examined:
  - bank profitability (returns)
  - loan supply (domestic and cross-border)

### Key findings
- Direct exposures to crisis countries:
  - "squeeze banks' profit margins, thereby reducing their returns."
- Indirect exposures:
  - indirect exposures to crisis countries enhance the negative effect on profitability.
  - indirect exposures to non-crisis countries mitigate the negative effect on profitability.
- Real (real-economy) effects:
  - crisis exposures reduce banks' supply of domestic loans.
  - crisis exposures reduce banks' supply of cross-border loans.
- General conclusion:
  - Results, based on a large global sample, support the notion that interconnected financial systems facilitate shock transmission.

### Subject classification and keywords
- Subject: Bank credit, Banking, Banking crises, Financial crises, Financial institutions, Foreign currency exposure, Loans, Money, Syndicated loans, Systemic crises
- Keywords: balance sheet, bank level, bank performance, bank type, Banking crises, commercial bank, crisis exposure, financial networks, Foreign currency exposure, Global, Loans, long-term interbank exposures, return on assets, shock transmission, syndicated loan, syndicated loans, systemic banking crises, Systemic crises, WP

*Italic: Content derived from IMF Working Paper "Crisis Transmission in the Global Banking Network" (Working Paper No. 2016/091) by Galina Hale, Tümer Kapan, and Camelia Minoiu, April 12, 2016.*

---

## Content in this bundle

- **_wp1691**
  - [_wp1691 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2016/_wp1691.pdf.md){rel="alternate" type="text/markdown"}
  - [_wp1691 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2016/_wp1691.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/crisis-transmission-in-the-global-banking-network-43865_