Assessment of The Resilience of The EMCCA Banking System To Cascade Contagion : An Approach Based on Network Theory

In the context of global health crisis where several banking systems were already weakened by the 2008 financial crisis and amplified by the 2014 oil shock for some economies. This paper shows through empirical analysis using network theory that connectivity can be a resilient factor for banking system as it becomes a channel through which banks with liquidity shortages could find funding from those with funding capacity. In addition, we present measures that can help banking supervisors to identify systemically important banks and vulnerable banks. The vulnerable banks are those banks that are exposed to a possible shock, and the liquidity stressful banks. This will increase efficient supervisions for banking supervisors, thus, reducing systemic risks