EconPapers    
Economics at your fingertips  
 

A Contagion through Exposure to Foreign Banks during the Global Financial Crisis

Cyn-Young Park (cy.park@hotmail.com) and Kwanho Shin

No 516, ADB Economics Working Paper Series from Asian Development Bank

Abstract: Although the global financial crisis of 2008 took root in the advanced countries, its shocks spread through the emerging economies, reflecting the increasingly interconnected global financial system. This paper develops an empirical methodology to test the contagion effect at the country level using bilateral data on bank claims between countries. It measures the direct and indirect exposures of emerging economies to crisis countries and tests whether these matter for capital outflows from emerging economies. The paper measures these exposures to the crisis-affected countries by using bilateral foreign claims sourced from Bank for International Settlements (i) consolidated banking statistics foreign claims on immediate counterparty and ultimate risk bases and (ii) locational banking statistics cross-border total claims. Findings show that emerging market economies more exposed directly or indirectly to banks in the crisis-affected countries suffered more capital outflows during the global financial crisis.

Keywords: capital outflows; contagion; direct/indirect exposures; global financial crisis; interconnectedness (search for similar items in EconPapers)
JEL-codes: E44 F15 F21 F34 F38 F42 F62 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2017-07-31
New Economics Papers: this item is included in nep-ban, nep-ifn and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.adb.org/publications/foreign-banks-financial-contagion Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0516

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde (econwp@adb.org).

 
Page updated 2024-12-18
Handle: RePEc:ris:adbewp:0516