Resilience and Fragility in Global Banking: Impacts on Emerging Economies

Marina Conesa, Giulia Lotti and Andrew Powell

No 10459, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: Theory suggests both resilience and fragility in banking networks. This paper finds both, exploiting a new database of cross-border syndicated lending to developing countries from 1993 to 2017. Shocks propagate via co-lenders driven by central players, but shocks impacting fringe banks have little impact. The global financial crisis and the appearance of South-South lenders prompted a decline in network centrality, suggesting greater resilience to normal shocks. Multilateral Development Banks may play a catalytic role, but their small size limits their ability to mitigate shock propagation. The ongoing Covid-19 crisis is not a normal shock, is hitting central players and will likely provoke significant contagion.

Keywords: Banks; Syndicate loans; Shock propagation; Systemic banking crises (search for similar items in EconPapers)
JEL-codes: F34 G21 L14 (search for similar items in EconPapers)
Date: 2020-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publications.iadb.org/publications/english ... erging-Economies.pdf (application/pdf)

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:idb:brikps:10459

DOI: 10.18235/0002504

Access Statistics for this paper

More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().