IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Good governance problems and recent financial crises in some EU countries

Listed author(s):
  • Gamberger, Dragan
  • Smuc, Tomislav
Registered author(s):

    This study examines 147 banking crises in the period of 1976-2011 documented by the International Monetary Fund. The countries affected by crises are analysed in respect of publicly available World Bank indicators in the periods of three years before the crises. Machine learning methodology for subgroup discovery is used for the analysis. It enabled identification of five subsets of crises. Two of them are identified as especially useful for the characterization of EU countries affected by the banking crises in the year 2008. Fast growing credit activity is a characteristic for the first subgroup while socioeconomic problems recognized by non-increasing quality of public health are decisive for the second subgroup. Comparative analysis of the EU countries included into the second subgroup and the EU countries affected by the banking crises but not included into this subgroup demonstrated statistically significant differences in respect of World Bank good governance indicator values for the period before the crisis. Control of corruption, rule of law, and government effectiveness are the indicators that are statistically different for these sets of countries. The result is fully in accordance with the Francis's model connecting governance indicators and financial fragility. The significance of the result is in the segmentation of the corpus of countries with banking crises and recognition of connections between banking crises, socioeconomic problems, and governance effectiveness in some EU countries. The conclusions of the study might be useful for the policy makers in stressing that future banking crises prevention should also focus on governance effectiveness, more strict law implementation and especially on measures against corruption.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    Paper provided by Kiel Institute for the World Economy (IfW) in its series Economics Discussion Papers with number 2013-39.

    in new window

    Date of creation: 2013
    Handle: RePEc:zbw:ifwedp:201339
    Contact details of provider: Postal:
    Kiellinie 66, D-24105 Kiel

    Phone: +49 431 8814-1
    Fax: +49 431 8814528
    Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Gianni De Nicolò & Marcella Lucchetta, 2011. "Systemic Risks and the Macroeconomy," NBER Chapters,in: Quantifying Systemic Risk, pages 113-148 National Bureau of Economic Research, Inc.
    2. Michael Francis, 2003. "Governance and Financial Fragility: Evidence from a Cross-Section of Countries," Staff Working Papers 03-34, Bank of Canada.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:zbw:ifwedp:201339. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.