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Causes of banking crises revisited

  • Klomp, Jeroen
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    We examine to what extent there exists heterogeneity in the causes of a banking crisis. For this purpose, we use a random coefficient logit model including 110 countries between 1970 and 2007. We conclude that there exists significant heterogeneity in the causes of a banking crisis. We find that a high credit growth, a negative GDP growth and a high real interest rate are on average the most important causes of a banking crisis. However, none of the variables has a significant impact in more than 60 percent of the banking crises. Besides we find that the impact of the determinants differ between systemic and non-systemic crises and across stages of economic development.

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    Article provided by Elsevier in its journal The North American Journal of Economics and Finance.

    Volume (Year): 21 (2010)
    Issue (Month): 1 (March)
    Pages: 72-87

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    Handle: RePEc:eee:ecofin:v:21:y:2010:i:1:p:72-87
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