Anatomy of international banking crises at the onset of the Great Recession
AbstractThe paper examines a wide range of potential predictors of 25 international banking crises that broke out in 2007–2011 on the basis of cross–sectional logit models and the BCT (binary classification tree) algorithm, a novel technique in assessing the causes of banking crises. The major determinants of the crises arise from excessive credit depth (measured as private credit to GDP ratio) and illiquidity of the banking sector (credits to deposits ratio). The implementation of explicit deposit insurance schemes is also a pro–crisis factor due to the moral hazard effect they tend to cause. On the contrary, higher values of remittance inflows to GDP decrease the susceptibility to banking crises. These findings are robust under both methodologies. Lower bank concentration, bigger values of cost to income ratios as well as a higher level of economic liberalization make countries more vulnerable to banking crises, as derived from the logit analysis.
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 University Library of Munich, Germany in its series MPRA Paper with number 51236.
Date of creation: 26 Oct 2013
Date of revision:
banking crises; Great Recession; logit analysis; binary classification tree;
Find related papers by JEL classification:
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-14 (All new papers)
- NEP-CBA-2013-11-14 (Central Banking)
- NEP-DCM-2013-11-14 (Discrete Choice Models)
- NEP-HPE-2013-11-14 (History & Philosophy of Economics)
- NEP-MAC-2013-11-14 (Macroeconomics)
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.:
- Beck, Thorsten & De Jonghe, Olivier & Schepens, Glenn, 2013.
"Bank competition and stability: Cross-country heterogeneity,"
Journal of Financial Intermediation,
Elsevier, vol. 22(2), pages 218-244.
- T. Beck & O. De Jonghe & G. Schepens, 2011. "Bank competition and stability: cross-country heterogeneity," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/732, Ghent University, Faculty of Economics and Business Administration.
- Büyükkarabacak, Berrak & Valev, Neven, 2012. "Credit information sharing and banking crises: An empirical investigation," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 788-800.
- Luc Laeven, 2011. "Banking Crises: A Review," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 17-40, December.
- Apanard P. Angkinand & Thomas D. Willett, 2011. "Exchange rate regimes and banking crises: the channels of influence investigated," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 256-274, 07.
- Rudiger Ahrend & Jens Arnold & Fabrice Murtin, 2011.
"Have more strictly regulated banking systems fared better during the recent financial crisis?,"
Applied Economics Letters,
Taylor & Francis Journals, vol. 18(5), pages 399-403.
- Ahrend, Rudiger & Arnold, Jens & Murtin, Fabrice, 2009. "Have more strictly regulated banking systems fared better during the recent financial crisis?," MPRA Paper 20135, University Library of Munich, Germany.
- Jeffrey A. Frankel & Shang-Jin Wei, 2004. "Managing Macroeconomic Crises," NBER Working Papers 10907, National Bureau of Economic Research, Inc.
- Rodolfo Maino & Patrick A. Imam & Yasuhisa Ojima, 2013. "Macroprudential Policies for a Resource Rich Economy The Case of Mongolia," IMF Working Papers 13/18, International Monetary Fund.
- Ray Barrell & E. Philip Davis & Dilruba Karim & lana Liadze, 2011. "How Idiosyncratic are Banking Crises in OECD Countries?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 216(1), pages R53-R58, April.
- repec:nsr:niesrd:330 is not listed on IDEAS
- Klomp, Jeroen, 2010. "Causes of banking crises revisited," The North American Journal of Economics and Finance, Elsevier, vol. 21(1), pages 72-87, March.
- Caprio, Gerard & D’Apice, Vincenzo & Ferri, Giovanni & Puopolo, Giovanni Walter, 2014.
"Macro-financial determinants of the great financial crisis: Implications for financial regulation,"
Journal of Banking & Finance,
Elsevier, vol. 44(C), pages 114-129.
- Caprio, Gerard Jr. & D'Apice, Vincenzo & Ferri, Giovanni & Puopolo, Giovanni Walter, 2010. "Macro Financial Determinants of the Great Financial Crisis: Implications for Financial Regulation," MPRA Paper 26088, University Library of Munich, Germany.
- Büyükkarabacak, Berrak & Valev, Neven T., 2010. "The role of household and business credit in banking crises," Journal of Banking & Finance, Elsevier, vol. 34(6), pages 1247-1256, June.
- E. Davis & Dilruba Karim & Iana Liadze, 2011. "Should multivariate early warning systems for banking crises pool across regions?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 147(4), pages 693-716, November.
- Apanard P. Angkinand & Wanvimol Sawangngoenyuang & Clas Wihlborg, 2010. "Financial Liberalization and Banking Crises: A Cross-Country Analysis-super-," International Review of Finance, International Review of Finance Ltd., vol. 10(Financial), pages 263-292.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.