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Banking Crises in Emerging Markets: Presumptions and Evidence

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Author Info
Barry Eichengreen (Professor of Economics and Political Science, UC Berkeley)
Carlos Arteta (UC 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 Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley in its series Center for International and Development Economics Research, Working Paper Series with number 1007.

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Date of creation: 01 Aug 2000
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Handle: RePEc:cdl:ciders:1007

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Keywords: banking sector; banking crises; emerging markets;

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References listed on IDEAS
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    Other versions:
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    Other versions:
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    Other versions:
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