Spillovers through banking centers: a panel data analysis of bank flows

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Van Rijckeghem, Caroline and Weder, Beatrice (2003) Spillovers through banking centers: a panel data analysis of bank flows. Journal of international money and finance, 22 (4). pp. 483-509. ISSN 0261-5606

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This paper presents evidence that spillovers through bank lending contributed to the transmission of currency crises during the recent episodes of financial instability in emerging markets. The innovation of the paper is that it looks beyond aggregated measures of contagion into the structure of bank flows, disaggregating by banking centers. The main findings are that caused by banks’ exposures to a crisis country help predict flows in third countries after the Mexican and Asian crises, but not after the Russian crisis. In the latter, there is evidence of a generalized outflow from emerging markets. The importance of spillovers through centers suggests that countries might reduce contagion risk by diversifying the sources of their financing and by carefully monitoring borrowing from creditors exposed to potential crisis countries.
Item Type: Article
Uncontrolled Keywords: international banking; financial contagion; currency crisis
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Arts and Social Sciences
Depositing User: Caroline Van Rijckeghem
Date Deposited: 07 May 2007 03:00
Last Modified: 26 Apr 2022 08:05
URI: https://research.sabanciuniv.edu/id/eprint/291

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