Does financial connectedness predict crises?. Minoiu, C., Kang, C., Subrahmanian, V. S., & Berea, A. Quantitative Finance, 15(4):607–624, April, 2015. 00025
Does financial connectedness predict crises? [link]Paper  doi  abstract   bibtex   
The global financial crisis has reignited interest in models of crisis prediction. It has also raised the question whether financial interconnectedness—a possible source of systemic risk—can serve as an early warning indicator of crises. In this paper, we examine the ability of connectedness in the global network of financial linkages to predict systemic banking crises during the 1978–2010 period. Our results indicate that increases in a country’s own connectedness and decreases in its neighbours’ connectedness are associated with a higher probability of banking crises after controlling for macroeconomic fundamentals. Our findings suggest that financial interconnectedness has early warning potential, especially for the 2007–2010 wave of systemic banking crises.
@article{minoiu_does_2015,
	title = {Does financial connectedness predict crises?},
	volume = {15},
	issn = {1469-7688},
	url = {http://dx.doi.org/10.1080/14697688.2014.968358},
	doi = {10.1080/14697688.2014.968358},
	abstract = {The global financial crisis has reignited interest in models of crisis prediction. It has also raised the question whether financial interconnectedness—a possible source of systemic risk—can serve as an early warning indicator of crises. In this paper, we examine the ability of connectedness in the global network of financial linkages to predict systemic banking crises during the 1978–2010 period. Our results indicate that increases in a country’s own connectedness and decreases in its neighbours’ connectedness are associated with a higher probability of banking crises after controlling for macroeconomic fundamentals. Our findings suggest that financial interconnectedness has early warning potential, especially for the 2007–2010 wave of systemic banking crises.},
	number = {4},
	urldate = {2016-08-01},
	journal = {Quantitative Finance},
	author = {Minoiu, Camelia and Kang, Chanhyun and Subrahmanian, V. S. and Berea, Anamaria},
	month = apr,
	year = {2015},
	note = {00025},
	keywords = {finance, collapse, early-warning-signals, systemic-risks},
	pages = {607--624},
	file = {Minoiu et al. - 2015 - Does financial connectedness predict crises.pdf:C\:\\Users\\rsrs\\Documents\\Zotero Database\\storage\\K4QK86W7\\Minoiu et al. - 2015 - Does financial connectedness predict crises.pdf:application/pdf}
}

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