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Financial networks and systemic risk vulnerabilities: a tale of Indian banks

Ahmad, Wasim, Tiwari, Shiv Ratan, Wadhwani, Akshay, Khan, Mohammad Azeem and Bekiros, Stelios (2023) Financial networks and systemic risk vulnerabilities: a tale of Indian banks. Research in International Business and Finance, 65. ISSN 0275-5319

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Identification Number: 10.1016/j.ribaf.2023.101962

Abstract

This study identifies the nature and direction of unprecedented upheavals in the Indian banking sector which is linked to credit market asymmetry. A tail-driven network approach with a mixed sample of banks and firms exhibits the characteristics of the twin-balance-sheet syndrome. We construct the networks with a degree of interconnectedness at different quantiles and identify major systemic risk emitters and receivers. Furthermore, we find a spillover of the riskiness of deep-in-debt firms to banks. Smaller banking institutions evince a greater connection to banks and firms than larger ones. Our results are valuable for policymakers formulating financial stabilization policies and investors considering Indian markets for various opportunities.

Item Type: Article
Additional Information: © 2023 Elsevier B.V.
Divisions: India Observatory
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HG Finance
Date Deposited: 27 Apr 2023 23:23
Last Modified: 23 Feb 2024 17:24
URI: http://eprints.lse.ac.uk/id/eprint/118749

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