Exploring the transmission channels of contagious bank runs

Martin Brown, Stefan Trautmann, Razvan Vlahu 10 April 2014

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Financial contagion – the situation in which liquidity or insolvency risk is transmitted from one financial institution to another – is viewed by policymakers and academics as a key source of systemic risk in the banking sector. In particular, the events in the 2007–2009 Global Crisis have turned the attention of policymakers towards the potential contagion of liquidity withdrawals across banks and the resulting implications for financial stability.

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Topics:  Financial markets

Tags:  experimental economics, financial stability, financial crisis, global crisis, banking, contagion, banks, systemic risk, bank runs

Contagion in Europe: Evidence from the sovereign debt crisis

Paolo Manasse, Luca Zavalloni 25 June 2012

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"Contagion" is today's buzzword (de Haan and Mink 2012, Manasse and Trigilia 2011).

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Topics:  Europe's nations and regions Global economy

Tags:  contagion, Eurozone crisis

Determinants of banking system fragility: A regional perspective

Hans Degryse, Muhammad Ather Elahi, María Fabiana Penas 21 March 2012

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It is well known that banks face shocks both on their asset and liability side. A shock that initially affects one institution can become systemic and infect the larger local economy. The globalisation of banking implies further that shocks affecting a particular bank or country can now affect not only the local real economy but also the financial system and real economy in other countries (Peek and Rosengren 1997, 2000, for example, show that shocks hitting Japanese banks generate supply-side effects on the real economy in the US).

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Topics:  International finance

Tags:  contagion, bank fragility

Capping interest rates to stop contagion in the Eurozone

Bernard Delbecque 17 October 2011

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A straightforward solution to stop contagion would be to appoint the ECB as a lender of last resort in the government bond markets (Wyplosz 2011a). By making it clear that it is fully committed to exert this function, the ECB would restore confidence in the markets.

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Topics:  EU institutions EU policies

Tags:  ECB, contagion, Eurozone crisis, EFSF

The fear of contagion in Europe

Paolo Manasse, Giulio Trigilia 06 July 2011

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What to do about Greece? So far, much of the debate has split into two camps:

  • bail-in-ers, the advocates of coercive (but soft) restructuring of Greek debt, and
  • bail-out-ers, those who favour the procrastination of EU-IMF lending plus “voluntary” rollover.

Little of this debate hinges on whether Greece is solvent or not. Everyone agrees that, barring a miraculous rebound in growth, Greece is broke.

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Topics:  EU policies Europe's nations and regions Global crisis

Tags:  contagion, Greece, Eurozone crisis, Lehman Brothers

Sovereign Default Risk and Bank Fragility in Financially Integrated Economies

Olivier Jeanne, Patrick Bolton,

Date Published

Mon, 04/25/2011

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Understanding and quantifying contagion

Harald Hau, Choong Tze Chua, Sandy Lai 05 February 2011

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Contagion is one of the more elusive concepts in the current debate about the financial crisis. Indeed, the logic behind it is often unclear.

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Topics:  Europe's nations and regions Global crisis International finance

Tags:  contagion, Eurozone crisis, Bond market

Ireland’s rescue package: Disaster for Ireland, bad omen for the Eurozone

Barry Eichengreen 03 December 2010

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The Irish “rescue package” finalised over the weekend is a disaster. You can say one thing for the European Commission, the ECB, and the German government – they never miss an opportunity to make things worse.

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Topics:  EU policies Global crisis

Tags:  eurozone, contagion, Irish bailout

Finding contagion

Prakash Kannan, Friederike (Fritzi) Koehler-Geib 03 December 2009

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The “subprime crisis” became the “global crisis” when Lehman Brothers was allowed to collapse. The 2007 financial shock, which was limited to a handful of G7 nations, mutated into a full-blown global economic crisis in September 2008.

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Topics:  Global economy

Tags:  global crisis, contagion, surprise

Searching for international contagion in the 2008 financial crisis

Andrew K Rose, Mark M. Spiegel 03 October 2009

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The roots of the 2008 global financial crisis surely lie in the US real estate bubble, at least in part. After the US real estate market peaked in 2006, mortgage foreclosures began to rise, especially for subprime borrowers. Accordingly, the value of these mortgages – often pooled together and sold off as pools of securitised assets – began to fall.

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Topics:  Global economy

Tags:  global crisis, contagion

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