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Financial systems and banking crises: An assessment

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  • Ruiz-Porras, Antonio

Abstract

Traditionally an old concern among economists has referred to the effects that specific financial systems may have on economic performance. Here we investigate the “stylised facts” among financial systems and banking crises by using individual and principal-components indicators and sets of OLS regressions. The study relies on a set of banking fragility, financial structure and development indicators for a sample of 47 economies between 1990 and 1997. The stylised facts suggest that financial development is associated to financial systems leaded by stock and securities markets. Furthermore the evidence suggests that such association is magnified during episodes of borderline or systemic banking crises. Thus what our findings might suggest is that banking crises may encourage financial development and the transformation of financial systems into market-based ones.

Suggested Citation

  • Ruiz-Porras, Antonio, 2006. "Financial systems and banking crises: An assessment," MPRA Paper 168, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:168
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    File URL: https://mpra.ub.uni-muenchen.de/168/1/MPRA_paper_168.pdf
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    References listed on IDEAS

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    1. Ben Bernanke & Mark Gertler, 1990. "Financial Fragility and Economic Performance," The Quarterly Journal of Economics, Oxford University Press, vol. 105(1), pages 87-114.
    2. Franklin Allen, 2001. "Financial Structure and Financial Crisis," International Review of Finance, International Review of Finance Ltd., vol. 2(1&2), pages 1-19.
    3. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2003. "Bank Concentration and Crises," NBER Working Papers 9921, National Bureau of Economic Research, Inc.
    4. Jose A. Lopez & Mark M. Spiegel, 2002. "Financial structure and macroeconomic performance over the short and long run," Pacific Basin Working Paper Series 2002-05, Federal Reserve Bank of San Francisco.
    5. Frederic S. Mishkin, 1999. "Global Financial Instability: Framework, Events, Issues," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 3-20, Fall.
    6. Demirguc-Kunt, Asli & Huizinga, Harry, 2000. "Financial structure and bank profitability," Policy Research Working Paper Series 2430, The World Bank.
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    Cited by:

    1. Antonio Ruiz-Porras, 2008. "Banking Competition and Financial Fragility: Evidence from Panel-Data," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 23(1), pages 49-87.
    2. Ruiz-Porras, Antonio, 2008. "Financial structure, financial development and banking fragility: International evidence," MPRA Paper 12124, University Library of Munich, Germany.

    More about this item

    Keywords

    Financial systems; banking crises; financial structure; financial development;

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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