We systematically examine how bank characteristics are related to a bank's financial contagion exposure. Examining capital requirements, we find evidence that while tier 1 capital requirements are negatively related to a bank's contagion exposure, the sum of tier 1 and tier 2 capital ratios are...

Over the last fifty years, increasingly sophisticated risk measurement and management techniques have revolutionized the field of finance. More recently, the globalization of financial markets and policy changes in the regulation of financial institutions have impacted upon how commercial banks...