The Changing Network of Financial Market Linkages: The Asian Experience
Chowdhury, Biplob; Dungey, Mardi; Kangogo, Moses; Sayeed, Mohammad Abu; Volkov, Vladimir | October 2018
Abstract
Recent international financial crises highlight the advantages of understanding the global financial system as a network of economies in which cross-border financial linkages are fundamental to the spread of systemic risk. We investigate the changing network of financial markets for six periods from 1995–2016, constructing a network that captures the concepts of the direction of links between markets, the significance of these links, and their strength. Emphasis is placed on the transition of the networks before and after the Asian financial crisis of 1997–1998 and the global financial crisis of 2008–2009. The analysis demonstrates the increase in interconnectedness during periods of stress and the fall in the number of links in post crisis periods. At the same time, the results reveal a general deepening of the connections of the Asian market with the rest of the world over the past 2 decades. They also suggest that many of these markets have transitioned from being primarily linked to developed non-Asian markets through key bridge markets (such as Hong Kong, China) to developing stronger direct links with these external markets, highlighting the importance of key geographical nodes in market development.
Citation
Chowdhury, Biplob; Dungey, Mardi; Kangogo, Moses; Sayeed, Mohammad Abu; Volkov, Vladimir. 2018. The Changing Network of Financial Market Linkages: The Asian Experience. © Asian Development Bank. http://hdl.handle.net/11540/8802. License: CC BY 3.0 IGO.ISSN
2313-6537 (print)
2313-6545 (electronic)
Keywords
Financial Stability
Financial Management System
Financial Restructuring
Capital Market Development
Market Development
Economics
Erosion
International Economics
Macroeconomic
Macroeconomic Analysis
Performance Evaluation
Impact Evaluation
Foreign and Domestic Financing
Foreign Direct Investment
International Financial Market
Multilateral Financial Institutions
Economic Recession
Market
Crisis
Economic indicators
Growth models
Gross domestic product
Macroeconomics
Economic forecast
Business Financing
Investment Requirements
Business recessions
Multilateral development banks
Regulatory reform
Capital
Exports
Economic development projects
Economic policy
Economic forecasting
Investment Requirements
Banks
International banks and banking
Capital movements
Central banks and banking
Bills of exchange
Swaps
Banks and banking
Financial crisis
Credit control
Credit allocation
Capital market
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