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The price of inconvertible deposits: the stock market boom during the Argentine crisis

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  • Yeyati, Eduardo Levy
  • Schmukler, Sergio L.
  • Van Horen, Neeltje

Abstract

The Argentine crisis witnessed, among other things, a deposit run, the suspension of deposit convertibility, and a “boom” in the stock market. We argue that this boom reflects the cost that depositors were willing to incur to get their money out of the banking system, in light of the impending risks. This boom was generalized to all stocks and more pronounced in liquid stocks. Furthermore, the boom was a symptom that deposits were effectively restricted and that investors were not able to circumvent capital controls.

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File URL: http://www.sciencedirect.com/science/article/B6V84-4BJ22KN-4/2/5d9d8592eec0b7aeb6d71acea341a124
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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 83 (2004)
Issue (Month): 1 (April)
Pages: 7-13

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Handle: RePEc:eee:ecolet:v:83:y:2004:i:1:p:7-13

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Web page: http://www.elsevier.com/locate/ecolet

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Melvin, Michael, 2003. "A stock market boom during a financial crisis?: ADRs and capital outflows in Argentina," Economics Letters, Elsevier, vol. 81(1), pages 129-136, October.
  2. Ross Levine & Sergio L. Schmukler, 2003. "Migration, Spillovers,and Trade Diversion: The Impact of Internationalization on Stock Market Liquidity," NBER Working Papers 9614, National Bureau of Economic Research, Inc.
  3. Eduardo Levy Yeyati & Augusto de la Torre & Sergio Schmukler, 2003. "Living and Dying with Hard Pegs: The Rise and Fall of Argentina´s Currency Board," Business School Working Papers catorce, Universidad Torcuato Di Tella.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. El corralito cambiario (Blue)
    by ELY in Blog de Eduardo Levy Yeyati on 2012-03-21 16:33:00
  2. En defensa de los controles de capital
    by Eduardo Levy-Yeyati in Foco Económico on 2010-12-15 12:00:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Levy Yeyati, Eduardo & Schmukler, Sergio L. & Van Horen, Neeltje, 2006. "International financial integration through the law of one price," Policy Research Working Paper Series 3897, The World Bank.
  2. Auguste, Sebastian & Dominguez, Kathryn M.E. & Kamil, Herman & Tesar, Linda L., 2006. "Cross-border trading as a mechanism for implicit capital flight: ADRs and the Argentine crisis," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1259-1295, October.
  3. Eduardo Yeyati & Sergio Schmukler & Neeltje Van Horen, 2009. "Crises, Capital Controls, and Financial Integration," Working Papers id:2099, eSocialSciences.
  4. Eichler, Stefan & Karmann, Alexander & Maltritz, Dominik, 2009. "The ADR shadow exchange rate as an early warning indicator for currency crises," Journal of Banking & Finance, Elsevier, vol. 33(11), pages 1983-1995, November.
  5. Maltritz, Dominik & Eichler, Stefan, 2010. "Currency crisis prediction using ADR market data: An options-based approach," International Journal of Forecasting, Elsevier, vol. 26(4), pages 858-884, October.
  6. Demirguc-Kunt, Asli & Serven, Luis, 2009. "Are All the Sacred Cows Dead? Implications of the Financial Crisis for Macro and Financial Policies," Policy Research Working Paper Series 4807, The World Bank.
  7. Pasquariello, Paolo, 2008. "The anatomy of financial crises: Evidence from the emerging ADR market," Journal of International Economics, Elsevier, vol. 76(2), pages 193-207, December.
  8. Maurice Obstfeld & Jay C. Shambaugh & Alan M. Taylor, 2008. "Financial Stability, the Trilemma, and International Reserves," NBER Working Papers 14217, National Bureau of Economic Research, Inc.
  9. Eichler, Stefan, 2011. "Exchange rate expectations and the pricing of Chinese cross-listed stocks," Journal of Banking & Finance, Elsevier, vol. 35(2), pages 443-455, February.
  10. Marina Halac & Sergio Schmukler, 2003. "Distributional effects of crises : the role of financial transfers," Policy Research Working Paper Series 3173, The World Bank.
  11. Levy Yeyati, Eduardo & Schmukler, Sergio L. & Van Horen, Neeltje, 2009. "International financial integration through the law of one price: The role of liquidity and capital controls," Journal of Financial Intermediation, Elsevier, vol. 18(3), pages 432-463, July.

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