ADOLFO BARAJAS, EMILIANO BASCO, V. HUGO JUAN-RAMÓN, and CARLOS QUARRACINO
The simple answer to both questions in the title of this paper: No. We concentrate on three key aspects of the banking system’s difficulties during the 2001-02 crisis. Two are related to bank behavior (increasing dollarization of the balance sheet and expanding exposure to the government), and the other is related to the degree by which banks were hurt by depositor preferences, specifically, the run on deposits during 2001. We find that there was substantial cross-bank variation, that is, not all banks behaved equally nor were hurt equally by the macroeconomic shocks they faced during the run-up to the crisis. Furthermore, using panel data estimation, we find that depositors were able to distinguish high-risk from low-risk banks, and that individual bank’s exposure to currency and government default risk depended on fundamentals and other bank-specific characteristics. Finally, our results have implications for the existence of market discipline in periods of stress, and for banking regulation, which may have led banks to underestimate some of the risks they incurred. IMF Staff Papers (2007) 54, 621–662. doi:10.1057/palgrave.imfsp.9450022
In this study, the following statistical data are presented in detail: GDP at current market prices; prices of export crops; production and consumption of electricity; indicators of tourism activity; indicators of population, education, and employment; monetary survey; summary statement of the central bank; structure of interest rates; balance of payments; volume and value of principal exports and imports; breakdown of the government wage bill; external debt outstanding by creditors; summary of tax system; consolidated government expenditure; wage bill developments by ministry; and so on.
This paper describes economic developments in Comoros during the 1990s. The economic performance of Comoros during 1991–94 was characterized by real growth of about 1.6 percent a year on average, large financial imbalances, an eroding export base, and the accumulation of large domestic and external payments arrears. Public finances came under pressure as revenue performance deteriorated as a result of a narrow tax base, tax exemptions and evasion, and poor tax administration, exacerbated by rising current expenditures, which stemmed in particular from a growing wage bill.