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Ms. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon, and Mason A. Porter

Tables 1. Distance and Reciprocity Measures for 2009 and 2015 Networks 2. Clustering and Weighted Measures for 2009 and 2015 Networks 3. Centrality Measures for Aggregated and Multiplex Networks in 2015 4. Countries Exposed to and Affected by the UK Shock in 2015 A.1. Countries and economies exposed to and affected by China shock in 2015 D.1.1 Hubs and authorities centrality measures Figures 1. Global Financial Network Map 2. Creditor Centralities and Banking Assets 3. Debtor Centralities and Capital Flows 4. Comparison of Shock Propagation in a

Ms. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon, and Mason A. Porter

claims being wiped out. It is important to emphasize that the multilayer structure of the network allows us to identify these 28 countries with large banking claims on the UK. If we were simulating similar shock contagion using aggregated network (or sum of the total claims), only 9 of these 28 countries would have more than 35 percent of assets in the UK (see first column in Table 4 ), and, therefore, would be directly impacted by this shock. Table 4. Countries Exposed to and Affected by the UK Shock in 2015. Country Proportion of the UK in

Ms. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon, and Mason A. Porter
This paper studies the interconnectedness of the global financial system and its susceptibility to shocks. A novel multilayer network framework is applied to link debt and equity exposures across countries. Use of this approach—that examines simultaneously multiple channels of transmission and their important higher order effects—shows that ignoring the heterogeneity of financial exposures, and simply aggregating all claims, as often done in other studies, can underestimate the extent and effects of financial contagion.The structure of the global financial network has changed since the global financial crisis, impacted by European bank’s deleveraging and higher corporate debt issuance. Still, we find that the structure of the system and contagion remain similar in that network is highly susceptible to shocks from central countries and those with large financial systems (e.g., the USA and the UK). While, individual European countries (excluding the UK) have relatively low impact on shock propagation, the network is highly susceptible to the shocks from the entire euro area. Another important development is the rising role of the Asian countries and the noticeable increase in network susceptibility to shocks from China and Hong Kong SAR economies.
Mr. Tamim Bayoumi and Mr. Trung T Bui
This paper uses a novel variant of identification through hetroscedacity to estimate spillovers across U.S., Euro area, Japanese, and UK government bond and equity markets in a vector autoregression. The results suggest that U.S. financial shocks reverberate around the world much more strongly than shocks from other regions, including the Euro area, while inward spillovers to the U.S. from elsewhere are minimal. There is also evidence of two-way spillovers between the UK and Euro area financial markets and spillovers from Europe to Japan. The results also suggest that the uncertainty about the direction of causality of contemporaneous correlations—an issue that other techniques cannot tackle—is the dominant source of uncertainty in the estimated impulse response functions.