Global financial network and liquidity risk

John Nkwoma Inekwe, Yi Jin, Maria Rebecca Valenzuela

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)

Abstract

This article investigates the impact of global financial integration on liquidity risk. Using the network approach and bank-level data for 95 countries, we find weak asymmetry in the relationship between net stable funding and financial connectedness. Our results suggest that the degree of connectedness between banks is inversely related to funding stability. We also find that banks that are strongly connected to important lenders take on more risks relative to those that have independent access to finance in the financial network. Our results are consistent and invariant when either internal or external instruments are used to resolve econometric issues.
Original languageEnglish
Pages (from-to)593-613
Number of pages21
JournalAustralian Journal of Management
Volume43
Issue number4
Early online date24 Jul 2018
DOIs
Publication statusPublished - Nov 2018

Keywords

  • Financial markets
  • financial networks
  • lending
  • liquidity risk

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