Networks did not spread 2008 shocks in eurozone money market, paper argues
Network effects in eurozone interbank lending tend to mitigate shocks, researcher finds
Eurozone banking networks did not play a major role in spreading economic shocks during the 2008 financial crisis, a working paper published today (March 3) by the European Central Bank (ECB) argues.
In Network dependence in the euro area money market, Gerhard Rünstler estimates network dependence effects in the eurozone's unsecured interbank market. He uses data taken from the Target 2 database to measure the impact of networks on 102 banks' borrowing between January 2008 and March 2013.
Rünstl
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