Regional Financial Interlinkages and Financial Contagion within Europe

Inci Ötker-Robe (), Karl Driessen and Zsofia Arvai

No 2009/006, IMF Working Papers from International Monetary Fund

Abstract: This paper focuses on financial 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; analyzes potential channels of contagion through financial linkages; and assesses the magnitude of cross-border exposures between emerging and western European countries. Based on the stylized facts on these exposures, the paper provides simple 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: WP; CESE country; lender; bank; Austria; Financial linkages; contagion; spillover effects; funding exposure; credit growth; Central; Eastern; Southeastern Europe; emerging markets; common lender; CESE bank; CESE economy; parent bank; Commercial banks; Foreign currency exposure; Credit; Foreign banks; Financial contagion; Western Europe; Baltics; Europe (search for similar items in EconPapers)
Pages: 52
Date: 2009-01-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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Journal Article: Regional Financial Interlinkages and Financial Contagion within Europe (2009)
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