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Middle East and Central Asia > Yemen, Republic of

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Economic & financial crises & disasters x
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Cover IMF Working Papers
The Impact of Conflict and Political Instability on Banking Crises in Developing Countries
Ali Compaoré
,
Mr. Montfort Mlachila
,
Rasmané Ouedraogo
, and
Sandrine Sourouema
While there is an extensive literature examining the economic impact of conflict and political instability, surprisingly there have been few studies on their impact on the probability of banking crises. This paper therefore investigates whether rising conflict and political instability globally over the past several decades led to increased occurrence of banking crises in developing countries. The paper provides strong evidence that conflicts and political instability are indeed associated with higher probability of systemic banking crises. Unsurprisingly, the duration of a conflict is positively associated with rising probability of a banking crisis. Interestingly, the paper also finds that conflicts and political instability in one country can have negative spillover effects on neighboring countries’ banking systems. The paper provides evidence that the primary channel of transmission is the occurrence of fiscal crises following a conflict or political instability.
Keywords:
WP; banking crisis; fiscal crisis; government crisis; state fragility index; conflict; political instability; banking crises; fiscal crises; liquidity shortage; countries matter; banking turmoil; economic growth; banking liquidity shortage; occurrence of a banking crisis; systemic banking crisis; terms of trade; experiencing banking crisis; Commercial banks; Systemic crises; Terms of trade; Logit models; Sub-Saharan Africa; Global; banking crises in year; occurrence of banking crisis; start of a banking crisis
Cover IMF Staff Papers
IMF Staff papers: Volume 27 No. 3
International Monetary Fund. Research Dept.
This paper analyzes the implications of credit policies for output and growth and how they relate to the development of the current account and overall balance of payments. The framework chosen for the analysis is one in which the availability of financing is a direct and major determinant of current and future production. The paper identifies three channels through which credit policies can affect production in the economy. The principal conclusions are that limiting the overall level of credit is not a panacea for balance of payments problems; considerations regarding the distribution and the use of credit are important; in the absence of distortions, the current account objectives are best served by permitting credit expansion and investment to take place in the sector with the highest productivity, independent of whether this sector produces traded goods or nontraded goods; and tight credit policies can endanger the current account objectives when prevailing distortions lead to a “crowding out” of productive uses of credit.
Keywords:
SP; deposit; economic rent; court; bank; insurance scheme; income elasticity; resource rent tax; credit policy; concentration ratio; money stock; U.S. dollar; Deposit insurance; Resource rent tax; Commercial banks; Demand for money; Credit; Middle East; Western Europe; Global; mineral taxation policy; fund agreement