financial contagion


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Financial Contagion

A negative occurrence in one market, industry, or country that impacts other markets, industries, or countries. For example, problems in the U.S. financial markets starting in 2007 spread to other industries quickly and by 2008 had become a global financial crisis. Likewise, Japan's financial crisis in the 1990s had repercussions all over East Asia and elsewhere. See also: Globalization.

financial contagion

A financial problem that spreads among companies or regions. For example, Russia's 1998 default triggered sharp declines in the market values of debt issued by emerging countries.
References in periodicals archive ?
They also underestimated the risks of financial contagion and surges in migration flows.
The financial contagion spread to the rest of Asia including the Philippines.
Thus, it is an important method to study financial risk relevance and financial contagion.
Interbank Lending Patterns and Financial Contagion.
Fears of financial contagion spooked investors and sent them scurrying into the safety of government bonds, which helped push the benchmark 10-year Treasury yield to a fresh record low of 1.
The Europeans did not like it much when Lagarde told them their banks needed to be restructured or that they needed to build a firewall to protect against financial contagion for example, Greece, Pakistan, Tunisia, and Ukraine - that are crucial to global stability.
Section 2 reviews the literature on financial contagion and risk sharing on the interbank market.
cole Normale Superieure, France, and is the author of two books on financial contagion, as well as a number of research articles on financial correlation.
Such a shock could come from failure to fully implement reforms (owing to reform fatigue, for instance) or from financial shocks and stronger-than envisaged financial linkages, which could make policy measures less effective in containing domestic financial contagion, the report said.
Managing any outbreak of financial contagion will require nimble and judicious use of available policy buffers.
Former Polish PM Donald Tusk, now head of the European Council, didn't mince words on the point: "I am really afraid of this ideological or political contagion, not financial contagion, of the Greek crisis.
Moreover, we find that a linked network may be optimal ex ante even though linkages among reinsurers may spread financial contagion, supporting the model's prediction regarding social capital benefits associated with network cohesion.
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