The Contagion Effect and its Mitigation in the Modern Banking System

Purpose: The aim of this article is to identify which solutions reducing the contagion effect applied during first global financial crisis in 21st century may be treated as universal and such - also implemented caused by coronavirus pandemic. Design/Methodology/Approach: Literature analysis, theoretical foundations analysis historical data were used research method. Findings: impact on course scale depends many factors circumstances, differ respect a country additionally change time, spite fact that system disorder impulse transmission includes four basic channels, namely liquidity (repo transactions unsecured financing), assets public debt channel. Practical Implications: combination administrative tools (e.g., introduction temporary ban short-term sale shares listed stock exchange) central bank monetary policy instruments (e.g. practically unlimited access for banks) considerably reduce role channel transmission. Non-standard banking activity government securities markets led reduction sovereign bonds margins, thus contributing limitation thought Originality/Value: specifically indicated evaluated shock channels effects between countries banks through interbank market (taking into account differences specific character secured lending market). Also, operations strategic methods proposed.