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A research perspective on the propagation of the credit market turmoil

Author

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

Abstract

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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    File URL: http://www.ecb.europa.eu/pub/pdf/other/researchbulletin07en.pdf
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    Citations

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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.
    2. Lucey, Brian & Sevic, Aleksandar, 2010. "Investigating the determinants of banking coexceedances in Europe in the summer of 2008," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 20(3), pages 275-283, July.
    3. José Manuel González-Páramo, 2009. "Financial market failures and public policies," Hacienda Pública Española / Review of Public Economics, IEF, vol. 190(3), pages 127-156, September.

    More about this item

    Keywords

    credit market turmoil;

    JEL classification:

    • G0 - Financial Economics - - General

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