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
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.
The statistical data on gross domestic product, cost structure of vanilla exports, production of meat, fish, and dairy products, consumer price index, and consolidated government financial operations of Comoros have been presented in this paper. The wage bill developments, consolidated net statement of public enterprises, monetary survey, summary statement of the central bank, volume and value of principal exports, geographical distribution of trade, external debt payments, arrears by creditors, and related economic indices have been included in the statistical data.