Banking Sector Strength and the Transmission of Currency Crises
Abstract
We show that, complementary to trade and financial linkages, the strength of the bankingsector helps explain the transmission of currency crises. Specifically, we demonstrate thatthe Mexican, Thai, and Russian crises predominantly spread to countries with weaknesses intheir banking sectors. At the same time, the role of banking sector strength varies per crisis;where the Mexican crisis spread to countries with a strong presence of foreign banks indomestic credit provision, the Thai crisis disproportionately contaminated countries wherethe banking sector was most sensitive to currency realignments, wh ile the Russian crisisspread to countries with inefficiencies in the banking sector.Download Info
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Paper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 023.Length:
Date of creation: 2005
Date of revision:
Handle: RePEc:dgr:umamet:2005023
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Web page: http://www.maastrichtuniversity.nl/web/UMPublications.htm
Related research
Keywords: macroeconomics ;Other versions of this item:
- Allard Bruinshoofd & Bertrand Candelon & Katharina Raabe, 2005. "Banking Sector Strenght and the Transmission of Currency Crises," DNB Working Papers 032, Netherlands Central Bank, Research Department.
- F30 - International Economics - - International Finance - - - General
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-09-29 (All new papers)
- NEP-CWA-2005-09-29 (Central & Western Asia)
- NEP-FMK-2005-09-29 (Financial Markets)
- NEP-IFN-2005-09-29 (International Finance)
- NEP-MAC-2005-09-29 (Macroeconomics)
- NEP-PKE-2005-09-29 (Post Keynesian Economics)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Candelon, Bertrand, 2008. "A clinical analysis of financial crises," Open Access publications from Maastricht University urn:nbn:nl:ui:27-17125, Maastricht University.
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