A new BIS working paper finds that syndicated interconnectedness causes relatively mild shocks, if they affect the entire network, to be more problematic than the failure of a single active member In 2007, before the financial crisis started unfolding, syndicated loans made up 40% of cross-border funding to US companies and two-thirds of cross-border funding to emerging markets, and banks rapid withdrawal from syndicated lending appears to be one of the main channels that allowed the stress to propagate through the financial system. But the net effect that syndicated lending has on financial stability right now still isn’t well understood….