Joint research unit 7235

Contagion effect due to Lehman Brothers’ bankruptcy and the global financial crisis – From the perspective of the Credit Default Swaps’ G14 dealers.

Suzanne Salloy, Irfan Akbar Kazi

This article investigates the dynamics of conditional correlation among the G14 banks’ dealer for the credit default swap market from January 2004 until May 2009. By using the asymmetric dynamic conditional correlation model developed by Cappiello, Engle and Sheppard (2006), we examine if there is contagion during the global financial crisis, following Lehman Brothers’ bankruptcy of September 15th, 2008. The main contribution of this article is to analyze if the interdependence structure between the G14 banks changed significantly during the crisis period. We try to identify the banks which were the most or the least affected by losses induced by the crisis and we draw some conclusions in terms of their vulnerability to financial shocks. We find that all banks became highly interdependent during Lehman Brothers’ bankruptcy (short term impact), but only some banks faced high contagion during the global financial crisis (long term impact). Regulators who try to reinforce banks’ stability with the Basel 3 reforms proposals should be interested by these results.

AGENDA

Thursday 30 November 2023

Colloques et Workshops

Workshop on gender issues and development

Thursday 30 November 2023

Household heterogeneity in macroeconomic models: A historical perspective

Aurélien SAÏDI

Household heterogeneity in macroeconomic models: A historical perspective

Thursday 30 November 2023

Lunch

Aurélien SAÏDI

Household heterogeneity in macroeconomic models: A historical perspective

Thursday 30 November 2023

Valuing climate change costs in presence of climate-induced land use changes

François Bareille (INRAe/PSAE)

Salle 614B de 11h – 12h

Valuing climate change costs in presence of climate-induced land use changes

Thursday 30 November 2023

Développement Durable Environnement et Energie (DDEE)

François Bareille (INRAe/PSAE)

Salle 614B de 11h – 12h

Valuing climate change costs in presence of climate-induced land use changes

Tuesday 5 December 2023

Recherche et Economie et Socioéconomie Politique, des Institutions et des Régulations (RESPIR)

Clément Fontan (UC Louvain)

The ECB and the inflation monsters: strategic framing and the responsibility imperative (1998-2023)

Tuesday 5 December 2023

The ECB and the inflation monsters: strategic framing and the responsibility imperative (1998-2023)

Clément Fontan (UC Louvain)

The ECB and the inflation monsters: strategic framing and the responsibility imperative (1998-2023)

Thursday 7 December 2023

Groupe de travail Economie Comportementale

Vincent Lenglin (Université Catholique de Lille)

TBA

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