Borrowing banks increase credit risk, but network closeness reduces it significantly.
The study looked at how connected banks are to each other through loans and how this affects their credit risk. They found that banks that borrow a lot don't necessarily reduce their credit risk. In fact, active borrowing banks can actually increase credit risk. However, banks that are closely connected to others in the network tend to have lower credit risk. The country where a bank operates also plays a big role in how risky their credit is on the international market.