A research perspective on the propagation of the credit market turmoil

Nuno Cassola, Mathias Drehmann, Philipp Hartmann, Marco Lo Duca and Martin Scheicher

Research Bulletin, 2008, vol. 7, 2-5

Abstract: This article argues that available theory in the areas of information economics, asset pricing and market microstructure analysis can explain the most important economic mechanisms giving rise to the widespread transmission of the ongoing credit market turmoil across developed fi nancial systems during 2007. We identify increases in general uncertainty and adverse selection as likely primary factors in this transmission. Some fi rst selective empirical evidence is provided in support of these hypotheses. JEL Classification: G0

Keywords: credit; market; turmoil (search for similar items in EconPapers)
Date: 2008-06
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbrbu:2008:0007:1

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