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The Length and Cost of Banking Crises

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  • Mr. Edward J Frydl

Abstract

This paper reviews how recent studies of banking crises differ with regard to the dating, length, and costs of the crises. Significant discrepancies in these features suggest the absence of analytical consensus. The data allow an examination of the relation between perceived crisis length, as an index of delay in taking actions to resolve a crisis, and crisis costs. Cross-sectional evidence does not show that the length of a crisis is a significant contributor to its resolution cost. A measure of economic cost, the growth shortfall in the crisis period, shows more evidence of a link.

Suggested Citation

  • Mr. Edward J Frydl, 1999. "The Length and Cost of Banking Crises," IMF Working Papers 1999/030, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1999/030
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    References listed on IDEAS

    as
    1. Eichengreen, Barry & Rose, Andrew K & Wyplosz, Charles, 1996. "Contagious Currency Crises," CEPR Discussion Papers 1453, C.E.P.R. Discussion Papers.
    2. Eichengreen, Barry & Rose, Andrew & Wyplosz, Charles, 1996. " Contagious Currency Crises: First Tests," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(4), pages 463-484, December.
    3. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    4. Mr. Burkhard Drees & Ceyla Pazarbasioglu, 1995. "The Nordic Banking Crises: Pitfalls in Financial Liberalization?," IMF Working Papers 1995/061, International Monetary Fund.
    5. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    6. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    7. Ceyla Pazarbasioglu & Ms. Claudia H Dziobek, 1997. "Lessons From Systemic Bank Restructuring: A Survey of 24 Countries," IMF Working Papers 1997/161, International Monetary Fund.
    8. International Monetary Fund, 1998. "Leading Indicators of Banking Crises: Was Asia Different?," IMF Working Papers 1998/091, International Monetary Fund.
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    Keywords

    WP; banking crisis; resolution cost; crisis length; real interest rate; Bank Supervision; crisis cost; banking structure; crisis duration; Banking crises; Commercial banks; Crisis resolution; Bank resolution; Africa;
    All these keywords.

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