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Evidence on Financial Globalization and Crisis: Geographic/Bilateral External Balance Sheets



This article reviews the main sources of data on the geographic composition of countries' external balance sheets, covering both international and country-specific sources. It examines the determinants of bilateral financial assets and liabilities and discusses how gravity models, traditionally used in the trade literature, have been applied to explain bilateral financial links. A new dataset is used to derive some stylized facts on how bilateral financial links look like, how they have evolved over time and how they compare with trade links. The role that cross-border financial links play in the international transmission of shocks is discussed, with reference to the 2007-2009 financial crisis.

Suggested Citation

  • Sá, P., 2010. "Evidence on Financial Globalization and Crisis: Geographic/Bilateral External Balance Sheets," Cambridge Working Papers in Economics 1038, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1038

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    References listed on IDEAS

    1. Jean Imbs, 2010. "The First Global Recession in Decades," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 58(2), pages 327-354, December.
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    Cited by:

    1. Peltonen, Tuomas & Sarlin, Peter & Rancan, Michela, 2015. "Interconnectedness of the banking sector as a vulnerability to crises," Working Paper Series 1866, European Central Bank.

    More about this item


    Bilateral financial links; international financial network;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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