13  Ferguson, R., P. Hartmann, F. Panetta and R. Portes (2008), “International financial stability”, 9th Geneva Report on the World Economy, November, discuss the structural trends that preceded the crisis. 14  See Leitner, Y. (2005), “Financial networks: Contagion, commitment, and private sector bailouts”, Journal of Finance, for an application of network theory to the problem of financial contagion.
6  BIS Review 165/2009  Second, the extent and diversity of investment practices across all segments of the financial system requires particular attention. For example, fast-growing credit to similar sectors or regions could be a sign of vulnerabilities building up. The imbalances might become unsustainable later and unravel in a disorderly fashion. This risk requires looking at earlywarning signals in current market data.