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Banking Crises in Emerging Markets: Presumptions and Evidence

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Author Info
Barry Eichengreen (University of California, Berkeley)
Carlos Arteta (University of California, Berkeley)

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Abstract

The existing empirical literature on banking crises has not produced agreement on their causes. Using a sample of 75 emerging markets in 1975-1997, we attempt to determine what we know about banking crises by establishing which previous results are robust. Among the robust causes of emerging-market banking crises are rapid domestic credit growth, large bank liabilities relative to reserves, and deposit- rate decontrol. On the other hand, there is no compelling evidence of any particular relationship between exchange rate regimes and crises. Finally, the evidence that deposit insurance or a weak institutional environment heighten crisis risk appears to be fragile.

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Paper provided by EconWPA in its series Macroeconomics with number 0012012.

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Length: 60 pages
Date of creation: 09 Feb 2001
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Handle: RePEc:wpa:wuwpma:0012012

Note: 60 pages, Acrobat .pdf
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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; Mortgages

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