Regional Financial Interlinkages and Financial Contagion within Europe

Zsófia Arvai (), Karl Driessen () and Inci Ötker-Robe ()
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Zsófia Arvai: International Monetary Fund, http://www.imf.org/external/index.htm
Karl Driessen: International Monetary Fund, http://www.imf.org/external/index.htm

Czech Journal of Economics and Finance (Finance a uver), 2009, vol. 59, issue 6, 522-540

Abstract: The ongoing global financial turmoil has increased the importance of understanding the potential spillover effects brought about by financial interlinkages. This article focuses on such 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 before the turmoil; analyzes potential channels of contagion through financial linkages; and assesses the magnitude of cross-border exposures between emerging and advanced European economies. Based on the stylized facts on these exposures, the article provides 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.

Keywords: financial linkages; contagion; cross-border flows; spillover effects; credit growth; Central Eastern Southeastern Europe (search for similar items in EconPapers)
JEL-codes: F34 F36 G15 G21 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (33)

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Working Paper: Regional Financial Interlinkages and Financial Contagion within Europe (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:59:y:2009:i:6:p:522-540

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