Cross-Border Financial Surveillance: A Network Perspective

28 Pages Posted: 3 May 2010

See all articles by Marco A. Espinosa-Vega

Marco A. Espinosa-Vega

International Monetary Fund (IMF)

Juan A. Solé

International Monetary Fund (IMF)

Date Written: April 2010

Abstract

Effective cross-border financial surveillance requires the monitoring of direct and indirect systemic linkages. This paper illustrates how network analysis could make a significant contribution in this regard by simulating different credit and funding shocks to the banking systems of a number of selected countries. After that, we show that the inclusion of risk transfers could modify the risk profile of entire financial systems, and thus an enriched simulation algorithm able to account for risk transfers is proposed. Finally, we discuss how some of the limitations of our simulations are a reflection of existing information and data gaps, and thus view these shortcomings as a call to improve the collection and analysis of data on cross-border financial exposures.

Suggested Citation

Espinosa-Vega, Marco A. and Sole, Juan A., Cross-Border Financial Surveillance: A Network Perspective (April 2010). IMF Working Papers, Vol. , pp. 1-27, 2010. Available at SSRN: https://ssrn.com/abstract=1598051

Marco A. Espinosa-Vega (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8589 (Phone)
202-623-4311 (Fax)

Juan A. Sole

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

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