European Banking Distress and EMU: Institutional and Macroeconomic Risks
AbstractFinancial stability in Europe has received renewed attention with the advent of a common currency, wave of mergers and acquisitions among financial institutions, and greater market competition (e.g. ECB, 1999; IMF, 1999; OECD, 1999). This paper examines whether EU country banking systems are particularly vulnerable to systemic risk at present. Our approach is to examine episodes of banking sector distress for a large sample of countries, highlighting the experience of the EU. We estimate multivariate probit models linking the likelihood of banking problems to a set of macroeconomic variables and institutional characteristics. Institutional characteristics, made available by a new data set on corporate governance in the financial sector not previously used in this type of analysis, include aspects of bank supervision and regulation, restrictions on bank portfolios, and development of the banking system. Given these characteristics, the model predicts a low probability of banking sector distress in EMU countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 00-04.
Date of creation:
Date of revision:
Contact details of provider:
Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark
Phone: (+45) 3532 4411
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk/epru/
More information through EDIRC
Other versions of this item:
- Hutchison, Michael M, 2002. " European Banking Distress and EMU: Institutional and Macroeconomic Risks," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(3), pages 365-89, September.
- NEP-ALL-2003-05-08 (All new papers)
- NEP-EEC-2003-05-08 (European Economics)
- NEP-IFN-2003-05-08 (International Finance)
- NEP-MAC-2003-05-08 (Macroeconomics)
- NEP-MFD-2003-05-08 (Microfinance)
- NEP-RMG-2003-05-08 (Risk Management)
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.:
- Thomas F. Cargill & Michael M. Hutchison & Takatoshi Ito, 1997. "The Political Economy of Japanese Monetary Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262032473, December.
- Gertler, Mark, 1992. "Financial Capacity and Output Fluctuations in an Economy with Multi-period Financial Relationships," Review of Economic Studies, Wiley Blackwell, vol. 59(3), pages 455-72, July.
- Levine, Ross, 1998.
"The Legal Environment, Banks, and Long-Run Economic Growth,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 30(3), pages 596-613, August.
- Ross Levine, 1998. "The legal environment, banks, and long-run economic growth," Proceedings, Federal Reserve Bank of Cleveland, issue Aug, pages 596-620.
- Barry Eichengreen & Andrew K. Rose, 1998.
"Staying Afloat When the Wind Shifts: External Factors and Emerging-Market Banking Crises,"
NBER Working Papers
6370, National Bureau of Economic Research, Inc.
- Eichengreen, Barry & Rose, Andrew K, 1998. "Staying Afloat When the Wind Shifts: External Factors and Emerging-Market Banking Crises," CEPR Discussion Papers 1828, C.E.P.R. Discussion Papers.
- Frankel, Jeffrey A. & Rose, Andrew K., 1996.
"Currency crashes in emerging markets: An empirical treatment,"
Journal of International Economics,
Elsevier, vol. 41(3-4), pages 351-366, November.
- Jeffrey A. Frankel & Andrew K. Rose, 1996. "Currency crashes in emerging markets: an empirical treatment," International Finance Discussion Papers 534, Board of Governors of the Federal Reserve System (U.S.).
- Diamond, Douglas W & Dybvig, Philip H, 1983.
"Bank Runs, Deposit Insurance, and Liquidity,"
Journal of Political Economy,
University of Chicago Press, vol. 91(3), pages 401-19, June.
- Eichengreen, B., 1992. "Should the Maastricht Treaty be Saved?," Princeton Studies in International Economics 74, International Economics Section, Departement of Economics Princeton University,.
- Julián Caballero, 2012.
"Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?: Cross-Country Evidence on Bonanzas in Capital Inflows and Bonanza-Boom-Bust Cycles,"
71178, Inter-American Development Bank.
- Julian Caballero, 2012. "Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises? Cross-Country Evidence on Bonanzas in Capital Inflows and Bonanza-Boom- Bust Cycles," Research Department Publications 4775, Inter-American Development Bank, Research Department.
- Bems, Rudolfs & Jönsson, Kristian, 2005.
"Trade Deficits in the Baltic States: How Long Will the Party Last?,"
Working Paper Series
186, Sveriges Riksbank (Central Bank of Sweden).
- Rudolfs Bems & Kristian Jönsson Hartelius, 2006. "Trade Deficits in the Baltic States: How Long Will the Party Last?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(1), pages 179-209, January.
- Bems, Rudolfs & Jönsson Hartelius, Kristian, 2003. "Trade Deficits in the Baltic States: How Long Will the Party Last?," Working Paper Series in Economics and Finance 0543, Stockholm School of Economics, revised 05 Aug 2003.
- Jokipii , Terhi & Lucey, Brian, 2006.
"Contagion and interdependence: measuring CEE banking sector co-movements,"
Research Discussion Papers
15/2006, Bank of Finland.
- Jokipii, Terhi & Lucey, Brian, 2007. "Contagion and interdependence: Measuring CEE banking sector co-movements," Economic Systems, Elsevier, vol. 31(1), pages 71-96, March.
- Christian Calmès & Raymond Théoret, 2011. "Bank systemic risk and the business cycle: An empirical investigation using Canadian data," RePAd Working Paper Series UQO-DSA-wp322011, Département des sciences administratives, UQO.
- Edward J. Kane, 2005.
"Can the European Community Afford to Neglect the Need for More Accountable Safety-Net Management?,"
NBER Working Papers
11860, National Bureau of Economic Research, Inc.
- Edward Kane, 2006. "Can the European Community Afford to Neglect the Need for More Accountable Safety-Net Management?," Atlantic Economic Journal, International Atlantic Economic Society, vol. 34(2), pages 127-144, June.
- Christian Calmès & Raymond Théoret, 2012. "Bank systemic risk and the business cycle: Canadian and U.S. evidence," RePAd Working Paper Series UQO-DSA-wp022012, Département des sciences administratives, UQO.
- Tao Sun, 2011. "Identifying Vulnerabilities in Systemically-Important Financial Institutions in a Macro-Financial Linkages Framework," IMF Working Papers 11/111, International Monetary Fund.
- SÃ²nia MuÃ±oz & Ryan Scuzzarella & Martin CihÃ¡k, 2011. "The Bright and the Dark Side of Cross-Border Banking Linkages," IMF Working Papers 11/186, International Monetary Fund.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann).
If references are entirely missing, you can add them using this form.