Study Findings on Risk Management Published by Researchers at Al Ain University (Time-Varying Global Financial Stress Contagion in a Decade of Trade Wars and Geopolitical Fractures): Insurance – Risk Management

Insurance Daily News

2026 APR 09 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Current study results on risk management have been published. According to news reporting from Al Ain University by NewsRx journalists, research stated, “The objective of this study is to explore the time-varying shock transmission mechanism between aggregated financial stress indices (FSIs) of developed economies (the U.S., the U.K., the European Union (EU) and Japan) and the emerging economy of China.”

Our news journalists obtained a quote from the research from Al Ain University: “We employ a novel Time-Varying Parameter Vector Auto-Regression (TVP-VAR)-based ‘connectedness approach’ to capture dynamic shock spillovers without the limitations of arbitrarily chosen rolling windows, loss of observations, or excessive sensitivity to outliers, as it is grounded in a multivariate Kalman filter structure. The aggregated measures of the FSIs of China, the U.S., the U.K., the EU and Japan are incorporated from the Asian Development Bank’s data repository by using time-series observations from January 2010 to September 2023. The findings indicate that the FSI of China is influenced by financial stress shocks originating from Japan (18.35%) and the U.S. (16.86%) the most, whereas the U.K. (EU) contributes to only 8.42% (6.54%) of FSI shocks in China. This research article significantly captures China’s heightened vulnerability to external financial stress shocks from developed economic systems and underscores the critical importance of reinforcing financial resilience, strengthening macro-prudential regulations and early-warning systems, and expanding financial buffers during episodes of trade uncertainty like restrictions on China’s rare earth exports and solar panels, U.S. restrictions on industrial metal imports, Brexit, supply chain disruptions amid COVID-19, and geopolitical uncertainties like the Russia-Ukraine war.”

According to the news reporters, the research concluded: “Overall, this study provides actionable guidance for mitigating the impact of global financial stresses, improving risk management, and safeguarding economic stability in an increasingly interconnected and volatile international environment.”

For more information on this research see: Time-Varying Global Financial Stress Contagion in a Decade of Trade Wars and Geopolitical Fractures. Risks, 2026,14(3):70. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks14030070.

Our news editors report that additional information may be obtained by contacting Mosab I. Tabash, Department of Business Administration, College of Business, Al Ain University, Al Ain P.O. Box 64141, United Arab Emirates. Additional authors for this research include Suzan Sameer Issa, Mohammed Alnahhal, Zokir Mamadiyarov, Krzysztof Drachal.