What is financial contagion?

Financial Contagion

Financial contagion refers to a scenario in which small shocks, which initially affect only a few financial institutions or a particular region of an economy, spread to the rest of financial sectors and other countries whose economies were previously healthy, in a manner similar to the transmission of a medical disease. Financial contagion happens at both the international level and the domestic level.

Read more about Financial Contagion.

Some articles on financial contagion:

Financial Contagion - Policy Implications
... See also Financial regulation See also Wall Street reform Financial contagion is one of the main causes of financial regulation ... How to make domestic financial regulation and plan the international financial architecture to prevent financial contagion become the top priority for both domestic financial regulators and ... At international level, under today's modern financial systems, a complicated web of claims and obligations link the balance sheets of a wide variety of intermediaries, such as hedge funds and banks, into a global ...
Contagion Effect
... Financial contagion refers to a scenario in which small shocks, which initially affect only a few financial institutions or a particular region of an economy, spread to the rest of financial sectors and other ... Financial contagion happens at both the international level and the domestic level ... At the domestic level, usually the failure of a domestic bank or financial intermediary triggers transmission when it defaults on interbank liabilities and sells assets in a fire sale, thereby undermining confidence in ...
Contagion Effect - Explanations
... There are several branches of literatures explaining the mechanism of financial contagion ... currency crises, relating such crises to various monetary and financial sector vulnerabilities and trade factors ... the debt crisis of the early 1980s and 1990s, but also the observed historical pattern of contagion ...
Contagion Effect - Policy Implications
... See also Financial regulation See also Wall Street reform Financial contagion is one of the main causes of financial regulation ... How to make domestic financial regulation and plan the international financial architecture to prevent financial contagion become the top priority for ... At international level, under today's modern financial systems, a complicated web of claims and obligations link the balance sheets of a wide variety of ...

Famous quotes containing the words contagion and/or financial:

    Who knows but this hill may one day be a Helvellyn, or even a Parnassus, and the Muses haunt here, and other Homers frequent the neighboring plains?... It was a place where gods might wander, so solemn and solitary, and removed from all contagion with the plain.
    Henry David Thoreau (1817–1862)

    America is a nation with no truly national city, no Paris, no Rome, no London, no city which is at once the social center, the political capital, and the financial hub.
    C. Wright Mills (1916–1962)