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Author: Asli Demirgüç-Kunt Publisher: World Bank Publications ISBN: Category : Banks and banking Languages : en Pages : 52
Book Description
The paper studies the factors associated with the emergence of systemic banking crises in a large sample of developed and developing countries in 1980–94, using a multivariate logit econometric model. the results suggest that crises tend to erupt when the macroeconomic environment is weak, particularly when growth is low and inflation is high. Also, high real interest rates are clearly associated with systemic banking sector problems, and there is some evidence that vulnerability to balance of payments crises has played a role. Countries with an explicit deposit insurance scheme were particularly at risk, as were countries with weak law enforcement.
Author: Asli Demirgüç-Kunt Publisher: World Bank Publications ISBN: Category : Banks and banking Languages : en Pages : 52
Book Description
The paper studies the factors associated with the emergence of systemic banking crises in a large sample of developed and developing countries in 1980–94, using a multivariate logit econometric model. the results suggest that crises tend to erupt when the macroeconomic environment is weak, particularly when growth is low and inflation is high. Also, high real interest rates are clearly associated with systemic banking sector problems, and there is some evidence that vulnerability to balance of payments crises has played a role. Countries with an explicit deposit insurance scheme were particularly at risk, as were countries with weak law enforcement.
Author: Asli Demirgüç-Kunt Publisher: ISBN: Category : Languages : en Pages : 27
Book Description
Vulnerability to crises in the banking sector appears to be associated with these factors: a weak macroeconomic environment characterized by slow GDP growth and high inflation, vulnerability to sudden capital outflows, low liquidity in the banking sector, a high share of credit to the private sector, past credit growth, the existence of explicit deposit insurance, and weak institutions.In the 1980s and 1990s several countries experienced banking crises. Demirguuml;ccedil;-Kunt and Detragiache try to identify features of the economic environment that tend to breed problems in the banking sector.They do so by econometrically estimating the probability of a systemic crisis, applying a multivariate logit model to data from a large panel of countries, both industrial and developing, for the period 1980-94. Included in the panel as controls are countries that never experienced banking problems.The authors find that crises tend to occur in a weak macroeconomic environment characterized by slow GDP growth and high inflation. When these effects are controlled for, neither the rate of currency depreciation nor the fiscal deficit are significant.Also associated with a higher probability of crisis are vulnerability to sudden capital outflows, low liquidity in the banking sector, a high share of credit to the private sector, and past credit growth.Another factor significantly (and robustly) associated with increased vulnerability in the banking sector is the presence of explicit deposit insurance, suggesting that moral hazard has played a major role.Finally, countries with weak institutions (as measured by a law and order index) are more likely to experience crises.This paper-a product of the Development Research Group, World Bank, and the Research Department, International Monetary Fund-is part of a larger effort to understand the causes of banking crises.
Author: Mr.Stijn Claessens Publisher: International Monetary Fund ISBN: 1475561008 Category : Business & Economics Languages : en Pages : 66
Book Description
This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Author: Asli Demirgüç-Kunt Publisher: ISBN: Category : Languages : en Pages : 31
Book Description
The paper studies the factors associated with the emergence of systemic banking crises in a large sample of developed and developing countries in 1980-94, using a multivariate logit econometric model. The results suggest that crises tend to erupt when the macroeconomic environment is weak, particularly when growth is low and inflation is high. Also, high real interest rates are clearly associated with systemic banking sector problems, and there is some evidence that vulnerability to balance of payments crises has played a role. Countries with an explicit deposit insurance scheme were particularly at risk, as were countries with weak law enforcement.
Author: Asli Demirgüç-Kunt Publisher: ISBN: Category : Electronic books Languages : en Pages :
Book Description
September 1997 Vulnerability to crises in the banking sector appears to be associated with these factors: a weak macroeconomic environment characterized by slow GDP growth and high inflation, vulnerability to sudden capital outflows, low liquidity in the banking sector, a high share of credit to the private sector, past credit growth, the existence of explicit deposit insurance, and weak institutions. In the 1980s and 1990s several countries experienced banking crises. Demirgüç-Kunt and Detragiache try to identify features of the economic environment that tend to breed problems in the banking sector. They do so by econometrically estimating the probability of a systemic crisis, applying a multivariate logit model to data from a large panel of countries, both industrial and developing, for the period 1980-94. Included in the panel as controls are countries that never experienced banking problems. The authors find that crises tend to occur in a weak macroeconomic environment characterized by slow GDP growth and high inflation. When these effects are controlled for, neither the rate of currency depreciation nor the fiscal deficit are significant. Also associated with a higher probability of crisis are vulnerability to sudden capital outflows, low liquidity in the banking sector, a high share of credit to the private sector, and past credit growth. Another factor significantly (and robustly) associated with increased vulnerability in the banking sector is the presence of explicit deposit insurance, suggesting that moral hazard has played a major role. Finally, countries with weak institutions (as measured by a law and order index) are more likely to experience crises. This paper-a product of the Development Research Group, World Bank, and the Research Department, International Monetary Fund-is part of a larger effort to understand the causes of banking crises.
Author: Ms.Brenda Gonzalez-Hermosillo Publisher: International Monetary Fund ISBN: 1451845162 Category : Business & Economics Languages : en Pages : 115
Book Description
This paper empirically analyzes the contribution of microeconomic and macroeconomic factors in five recent episodes of banking system problems in the U.S. Southwest (1986–92), Northeast (1991–92), and California (1992–93); Mexico (1994–95); and Colombia (1982–87). The paper finds that a low capital equity and reserve coverage of problem loans ratio is a leading indicator of bank distress, signaling a high likelihood of near-term failure. Distress is shown to be a function of the same fundamental macro-micro sources of risk that determine bank failures. Focusing on distress has the advantage that the fragility of the banking system can be assessed before a crisis actually occurs.
Author: Mr.Stijn Claessens Publisher: International Monetary Fund ISBN: 1484355261 Category : Business & Economics Languages : en Pages : 754
Book Description
The lingering effects of the economic crisis are still visible—this shows a clear need to improve our understanding of financial crises. This book surveys a wide range of crises, including banking, balance of payments, and sovereign debt crises. It begins with an overview of the various types of crises and introduces a comprehensive database of crises. Broad lessons on crisis prevention and management, as well as the short-term economic effects of crises, recessions, and recoveries, are discussed.
Author: John H. Boyd Publisher: ISBN: Category : Languages : en Pages : 28
Book Description
We construct theory-based measures of systemic bank shocks, which differ from “banking crisis” indicators employed in many empirical studies and use these measures to reexamine the empirical evidence on some determinants of banking crises. We show that “banking crisis” indicators actually measure (lagged) policy responses to financial distress and show that key variables such as deposit insurance and safety net guarantees have a significantly different impact on the likelihood of a systemic bank shock and that of a policy response to banking distress. These differences imply that the findings of a large empirical literature need to be re-assessed and/or reinterpreted.
Author: Erlend Nier Publisher: International Monetary Fund ISBN: 1455210722 Category : Business & Economics Languages : en Pages : 64
Book Description
This paper investigates empirically the drivers of financial imbalances ahead of the global financial crisis. Three factors may have contributed to the build-up of financial imbalances: (i) rising global imbalances (capital flows), (ii) monetary policy that might have been too loose, (iii) inadequate supervision and regulation. Panel data regressions are performed for OECD countries from 1999 to 2007, so as to shed light on the relative importance of these factors, as well as the extent to which these factors might have interacted in fuelling the build-up. We find that the build-up of financial imbalances was driven by capital inflows and an associated compression of the spread between long and short rates. The effect of capital inflows on the build-up is amplified where the supervisory and regulatory environment was relatively weak. We find that, by contrast, differences in monetary policy cannot account for differences across countries in the build-up of financial imbalances ahead of the crisis.
Author: Asli Demirgüç-Kunt
Author: Asli Demirgüç-Kunt
Author: Asli Demirgüç-Kunt
Author: Mr.Stijn Claessens
Author: Asli Demirgüç-Kunt
Author: Asli Demirgüç-Kunt
Author: Ms.Brenda Gonzalez-Hermosillo
Author: Mr.Stijn Claessens
Author: Mark Copelovitch
Author: John H. Boyd
Author: Erlend Nier