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Ms. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanona, Mason A. Porter, and Mr. Vikram Haksar

shock. In step nine, all G-20 countries are affected by the shock to the UK banks, through either the banking, debt, or equity layers. The contagion will continue until the entire network is impacted by the shock, and for this example with the UK, it takes 10 steps. Interestingly, a similar type of a shock to the US resident banks with the threshold of 35 percent propagates faster through the network; it takes only eight steps for all countries in the network to be impacted by the comparable USA banking shock. All G-20 are affected at the step number seven. 19 Also

Ms. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon, and Mason A. Porter
This paper studies the interconnectedness of the global financial system and its susceptibility to shocks. A novel multilayer network framework is applied to link debt and equity exposures across countries. Use of this approach—that examines simultaneously multiple channels of transmission and their important higher order effects—shows that ignoring the heterogeneity of financial exposures, and simply aggregating all claims, as often done in other studies, can underestimate the extent and effects of financial contagion.The structure of the global financial network has changed since the global financial crisis, impacted by European bank’s deleveraging and higher corporate debt issuance. Still, we find that the structure of the system and contagion remain similar in that network is highly susceptible to shocks from central countries and those with large financial systems (e.g., the USA and the UK). While, individual European countries (excluding the UK) have relatively low impact on shock propagation, the network is highly susceptible to the shocks from the entire euro area. Another important development is the rising role of the Asian countries and the noticeable increase in network susceptibility to shocks from China and Hong Kong SAR economies.
Ms. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon, and Mason A. Porter
Ms. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon, and Mason A. Porter