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Russia–Ukraine war and systemic risk: Who is taking the heat?

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  • Qureshi, Anum
  • Rizwan, Muhammad Suhail
  • Ahmad, Ghufran
  • Ashraf, Dawood

Abstract

The Russia–Ukraine conflict has increased systemic vulnerabilities of the global financial system. We develop a database of news events and investigate the systemic risk implications of the conflict on Russia, Ukraine, France, Germany, Italy, the UK, the USA, and China. Results show that systemic instability costs of the conflict go beyond Russia and Ukraine. Sanctions cause systemic risk spillovers to European countries and the USA. Study findings caution against the accumulation of systemic risk as sanctions may adversely affect the rest of the world aside from the main target - Russia.

Suggested Citation

  • Qureshi, Anum & Rizwan, Muhammad Suhail & Ahmad, Ghufran & Ashraf, Dawood, 2022. "Russia–Ukraine war and systemic risk: Who is taking the heat?," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322002744
    DOI: 10.1016/j.frl.2022.103036
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    References listed on IDEAS

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    17. Cui, Jinxin & Maghyereh, Aktham, 2023. "Higher-order moment risk connectedness and optimal investment strategies between international oil and commodity futures markets: Insights from the COVID-19 pandemic and Russia-Ukraine conflict," International Review of Financial Analysis, Elsevier, vol. 86(C).
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    20. Qin, Meng & Su, Chi-Wei & Pirtea, Marilen Gabriel & Dumitrescu Peculea, Adelina, 2023. "The essential role of Russian geopolitics: A fresh perception into the gold market," Resources Policy, Elsevier, vol. 81(C).
    21. Kai‐Hua Wang & Zu‐Shan Wang & Hong‐Wen Liu & Xin Li, 2023. "Economic policy uncertainty and geopolitical risk: evidence from China and Southeast Asia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 37(2), pages 96-118, November.
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    More about this item

    Keywords

    Systemic risk; Russia–Ukraine war; Spillover risk; Sanctions;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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