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Determinants of the real impact of banking crises: A review and new evidence

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  • Philip Wilms
  • Job Swank
  • Jakob de Haan

Abstract

We examine which variables are robust in explaining cross-country differences in the real impact of systemic banking crises. Based on a meta-analysis, we identify 21 variables frequently used as determinants of the severity of crises. Employing nine proxies for crisis severity, we find that large current account imbalances are the most robust determinant of the real impact of banking crises. Countries with a high GDP per capita have more prolonged downfalls after the occurrence of a banking crisis. Exchange rate developments and pre-crisis GDP growth are related to the peak-to-trough impact of a banking crisis.

Suggested Citation

  • Philip Wilms & Job Swank & Jakob de Haan, 2014. "Determinants of the real impact of banking crises: A review and new evidence," DNB Working Papers 437, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:437
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    Cited by:

    1. Jan Kakes & Rob Nijskens, 2018. "Size of the banking sector: implications for financial stability," DNB Occasional Studies 1606, Netherlands Central Bank, Research Department.
    2. Candelon, Bertrand & Carare, Alina & Miao, Keith, 2016. "Revisiting the new normal hypothesis," Journal of International Money and Finance, Elsevier, vol. 66(C), pages 5-31.
    3. Grégory Levieuge & Yannick Lucotte & Florian Pradines-Jobet, 2019. "The Cost of Banking Crises: Does the Policy Framework Matter?," Working papers 712, Banque de France.
    4. repec:eee:poleco:v:55:y:2018:i:c:p:391-416 is not listed on IDEAS
    5. Thakor, Anjan V., 2016. "The highs and the lows: A theory of credit risk assessment and pricing through the business cycle," Journal of Financial Intermediation, Elsevier, vol. 25(C), pages 1-29.

    More about this item

    Keywords

    banking crises; real impact of crises; duration of crises;

    JEL classification:

    • F3 - International Economics - - International Finance
    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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