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A research perspective on the propagation of the credit market turmoil


  • Nuno Cassola
  • Mathias Drehmann
  • Philipp Hartmann
  • Marco Lo Duca
  • Martin Scheicher


This article argues that available theory in the areas of information economics, asset pricing and market microstructure analysis can explain the most important economic mechanisms giving rise to the widespread transmission of the ongoing credit market turmoil across developed fi nancial systems during 2007. We identify increases in general uncertainty and adverse selection as likely primary factors in this transmission. Some fi rst selective empirical evidence is provided in support of these hypotheses. JEL Classification: G0

Suggested Citation

  • Nuno Cassola & Mathias Drehmann & Philipp Hartmann & Marco Lo Duca & Martin Scheicher, 2008. "A research perspective on the propagation of the credit market turmoil," Research Bulletin, European Central Bank, vol. 7, pages 2-5.
  • Handle: RePEc:ecb:ecbrbu:2008:0007:1

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    Cited by:

    1. Hartmann, Philipp & Smets, Frank, 2018. "The first twenty years of the European Central Bank: monetary policy," Working Paper Series 2219, European Central Bank.

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    credit market turmoil;

    JEL classification:

    • G0 - Financial Economics - - General


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