02024cas a2200265 a 4500 AALejournalIMF007318 230101c9999 xx r poo 0 0eng d 5.00 USD 9781462309269 1018-5941 BD-DhAAL BD-DhAAL Munoz, Sonia. The Bright and the Dark Side of Cross-Border Banking Linkages / Sonia Munoz, Ryan Scuzzarella, Martin Cihak. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (51 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Cihak, Martin. Scuzzarella, Ryan. IMF Working Papers; Working Paper ; No. 2011/186 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/186/001.2011.issue-186-en.xml IMF e-Library