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Evolution of the Global Financial Network and Contagion [electronic resource] : A New Approach / Yevgeniya Korniyenko.

Author/Creator:
Korniyenko, Yevgeniya.
Publication:
Washington, D.C. : International Monetary Fund, 2018.
Format/Description:
Government document
Book
1 online resource (41 pages)
Series:
IMF eLibrary
IMF Working Papers; Working Paper ; No. 18/113
IMF Working Papers; Working Paper ; No. 18/113
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Summary:
This paper studies the interconnectedness of the global financial system and its susceptibility to shocks. A novel multilayer network framework is applied to link debt and equity exposures across countries. Use of this approach-that examines simultaneously multiple channels of transmission and their important higher order effects-shows that ignoring the heterogeneity of financial exposures, and simply aggregating all claims, as often done in other studies, can underestimate the extent and effects of financial contagion.The structure of the global financial network has changed since the global financial crisis, impacted by European bank's deleveraging and higher corporate debt issuance. Still, we find that the structure of the system and contagion remain similar in that network is highly susceptible to shocks from central countries and those with large financial systems (e.g., the USA and the UK). While, individual European countries (excluding the UK) have relatively low impact on shock propagation, the network is highly susceptible to the shocks from the entire euro area. Another important development is the rising role of the Asian countries and the noticeable increase in network susceptibility to shocks from China and Hong Kong SAR economies.
Notes:
Part of the IMF eLibrary collection.
Description based on print version record.
Contributor:
del Rio-Chanon, Rita Maria.
Patnam, Manasa.
Other format:
Print Version: Korniyenko, Yevgeniya. Evolution of the Global Financial Network and Contagion: A New Approach
ISBN:
1484353242 :
9781484353240
ISSN:
1018-5941
Publisher Number:
10.5089/9781484353240.001
Access Restriction:
Restricted for use by site license.