This paper focuses on financial interlinkages within Europe and potential contagion channeled through these interlinkages. It discusses the increased role of external financing as a source of funding for credit growth; analyzes potential channels of contagion through financial linkages; and assesses the magnitude of cross-border exposures between emerging and western European countries. Based on the stylized facts on these exposures, the paper provides simple indices of exposure to regional contagion that could help identify the likely pressure points and capture potential spillover effects and propagation channels of a regional shock originating from a given country.Eastern Europe, and Belarus, Russia, and Ukraine), although the rising trend has turned around more recently in a few countries ... Banking systems that are heavily dependent on foreign funding to support credit growth could face a sudden shortfall of, or costly access ... the degree of their support depends on market conditions; as funding conditions in home countries become more difficult, they may beanbsp;...
|Title||:||Regional Financial Interlinkages and Financial Contagion Within Europe|
|Author||:||Zsófia Árvai, Inci Ötker, Karl Driessen|
|Publisher||:||International Monetary Fund - 2009-01-01|