Regional Financial Interlinkages and Financial Contagion within Europe

Author/Editor:

Inci Ötker ; Karl Driessen ; Zsofia Arvai

Publication Date:

January 1, 2009

Electronic Access:

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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.

Series:

Working Paper No. 2009/006

Subject:

Banking Commercial banks Credit Financial contagion Financial institutions Financial sector policy and analysis Foreign banks Foreign currency exposure Money

English

Publication Date:

January 1, 2009

ISBN/ISSN:

9781451871531/1018-5941

Stock No:

WPIEA2009006

Pages:

52

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