How to Reduce the Risk Of Banking Problems
AbstractThis paper reviews the existing evidence on the origins of banking crises, provides new results on the impact of government bank ownership on financial stability, and discusses policy options that can prevent and mitigate the consequences of banking crises. We find that government ownership of banks increases the likelihood and fiscal cost of crises; albeit the latter result is weak. Among the policies recommended to minimize the occurrence of crises, we highlight the importance of sound macroeconomic policies, adequate financial infrastructure, incentive compatible regulations, and limiting government interference in the banking sector.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3054.
Date of creation: Nov 2003
Date of revision: Nov 2003
macroeconomics; financial infrastructure; financial stability;
Find related papers by JEL classification:
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
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