AbstractThe history of banking around the world has been punctuated by frequent systemic crises. As with Tolstoy's unhappy families, not all crises are the same; distinct roles have been played at different times by mismanagement, government interference and macroeconomic shocks. This review identifies common features of crises in recent decades and describes how costly they have been in terms of their fiscal burden and the impact on macroeconomic growth. It proceeds to outline the conceptual issues identified by theoreticians and considers appropriate policy responses. A lull in the new millennium led to optimism that banking crises might be a thing of the past, but the events of 2007-8 have shown such optimism, often characteristic of previous macro upswings, to be unwarranted.
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Bibliographic InfoPaper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2008-07.
Length: 31 pages
Date of creation: Sep 2008
Date of revision:
Publication status: published in Allan Berger, Philip Molyneux and John Wilson, eds., The Oxford Handbook of Banking, Oxford University Press, 2009.
Other versions of this item:
- Gerard Caprio & Patrick Honohan, 2008. "Banking Crises," Center for Development Economics 2008-09, Department of Economics, Williams College.
- Gerard Caprio, Jr. and Patrick Honohan, 2008. "Banking Crises," The Institute for International Integration Studies Discussion Paper Series iiisdp242, IIIS.
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