US bank interconnectedness is falling – San Fran Fed paper

Network

An economic letter published by the Federal Reserve Bank of San Francisco outlines a new way to assess the interconnectedness of banks.

Galina Hale, Jose A Lopez and Shannon Sledz examined data from the 32 largest bank holding companies that are subject to the Fed stress tests from the period of 2002–18.

Their method finds the connectedness between banks has been rising in recent years, a trend that other measures have not captured, the researchers say. It enables researchers to focus more

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