The Bright and the Dark Side of Cross-Border Banking Linkages /
When a country's banking system becomes more linked to the global banking network, does that system get more or less prone to a banking crisis? Using model simulations and econometric estimates based on a world-wide dataset, we find an M-shaped relationship between financial stability of a coun...
| Auteur principal: | |
|---|---|
| Autres auteurs: | , |
| Format: | Revue |
| Langue: | English |
| Publié: |
Washington, D.C. :
International Monetary Fund,
2011.
|
| Collection: | IMF Working Papers; Working Paper ;
No. 2011/186 |
| Accès en ligne: | Full text available on IMF |
| Résumé: | When a country's banking system becomes more linked to the global banking network, does that system get more or less prone to a banking crisis? Using model simulations and econometric estimates based on a world-wide dataset, we find an M-shaped relationship between financial stability of a country's banking sector and its interconnectedness. In particular, for banking sectors that are not very connected to the global banking network, increases in interconnectedness are associated with a reduced probability of a banking crisis. Once interconnectedness reaches a certain value, further increases in interconnectedness can increase the probability of a banking crisis. Our findings suggest that it may be beneficial for policies to support greater interlinkages for less connected banking systems, but after a certain point the advantages of increased interconnectedness become less clear. |
|---|---|
| Description: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Description matérielle: | 1 online resource (51 pages) |
| Format: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Accès: | Electronic access restricted to authorized BRAC University faculty, staff and students |