Chinese and European Financial Systems: Instability Drivers and Contagion Channels

Paolo Canofari and Alessandro Ponte
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Alessandro Ponte: Stony Brook University

International Advances in Economic Research, 2018, vol. 24, issue 4, No 2, 324 pages

Abstract: Abstract This paper identifies systemic risk levels in the Eurozone and China. We first analyze the political and macro-financial factors underlying potential financial instability in both currency areas. Then, we examine the impact of a possible breakup of the Eurozone on the Chinese financial system and the risk of redenomination of Chinese assets expressed in Euros. Finally, considering the increasing credit gap in the Chinese economy and the enduring political instability in several Eurozone countries, we warn against a possible opening of contagion channels between China and Europe.

Keywords: Sovereign risk; Financial Stability; Eurozone; China; Contagion; F30; G15; G20 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s11294-018-9713-9

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