As international financial integration gathers pace, interconnectivity has increased tremendously among financial institutions, financial markets and financial systems, a phenomenon to which the recent global financial crisis perhaps provided the best testimony. The interconnectivity among...

We examine the evolution of credit risk co-dependence in the banking sectors of over 65 countries. We find that there has been a significant increase in default risk co-dependence over the 3-year period leading up to the financial crisis. We also find that countries that are more integrated with...

The aim of this paper is to cast light on possible influences of current account imbalances on the escalation of systemic risk which hit the Eurozone. The hypothesis, which was set up by examining empirical evidence, points to heterogeneity across the macroeconomic conditions prevailing in...

We analyze the emergence of systemic risk in a network model of interconnected bank balance sheets. The model incorporates multiple sources of systemic risk, including size of financial institutions, direct exposure from interbank lendings, and asset fire sales. We suggest a new macroprudential...

This paper estimates an early warning system (EWS) for predicting systemic banking crises in a sample of low income countries in Sub-Saharan Africa. Since the average duration of crises in this sample of countries is longer than one year, the predictive performance of standard binomial logit...

This paper advances the study of Fiordelisi and Molyneux (2010) by examining the shareholder value efficiency and its determinants for a large sample of Japanese banks between 1999 and 2011. A new, specifically tailored measure of the Economic Value Added approach, based on the shadow price of...

Falling government and donor funding, which has traditionally supported microfinance, is followed by an expansion of financially self-sustainable Microfinance Institutions (MFIs). This development has raised the concern as to whether the social goals of traditional microfinance would be equally...

This study examines the efficiency of the financial sector in African countries. It aims to investigate if ìThe financial institutions are capable of distributing the economic resources efficiently. Empirical evidence supports a sound intermediation process and efficiency in the banking system...

The paper studies risk mitigation associated with capital regulation, in a context where banks may choose tail risk assets. We show that this undermines the traditional result that higher capital reduces excess risk-taking driven by limited liability. Moreover, higher capital may have an...