Policy Insights

Policy Insight 77: Cross-border financial linkages: Identifying and measuring vulnerabilities

• Philip Lane
22 Jan 2015

There has been spectacular growth in cross-border financial linkages over the last twenty years. Moreover, boom-bust cycles in international financial flows have contributed to financial instability and financial crises in a number of countries. While the coverage of international financial datasets has sharply improved in recent years, this column explains that the currently-available data lacks the detailed information (in particular, the matrix of cross-border sectoral exposures) to provide a sufficient basis for risk surveillance and monitoring. Accordingly, a high priority for policymakers is to implement current proposals to improve the scope and quality of international financial data.