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The Determinants of Banking Crises: Evidence From Developing and Developed Countries
Author:
Asli Demirgüç-Kunt null

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Ms. Enrica Detragiache
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Series:
IMF Working Papers
Volume/Issue:
Volume 1997: Issue 106
Language:
English
Publication Date:
01 Sep 1997
DOI:
https://doi.org/10.5089/9781451947175.001
ISBN:
9781451947175
ISSN:
1018-5941
Pages:
31
Keywords:
WP; banking crisis; bank; banking sector; interest rate; Banking Crises; Financial Fragility; Deposit Insurance; banking sector problem; banking sector fragility; rate of return; bank balance; asset portfolio; banking crisis variable; deposit insurance dummy; banking crisis dummy variable; bank supervisor; deposit insurance dummy variable; banking sector rescue operations; Commercial banks; Real interest rates; Africa; Middle East; Eastern Europe; Asia and Pacific
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The paper studies the factors associated with the emergence of systemic banking crises in a large sample of developed and developing countries in 1980–94, using a multivariate logit econometric model. The results suggest that crises tend to erupt when the macroeconomic environment is weak, particularly when growth is low and inflation is high. Also, high real interest rates are clearly associated with systemic banking sector problems, and there is some evidence that vulnerability to balance of payments crises has played a role. Countries with an explicit deposit insurance scheme were particularly at risk, as were countries with weak law enforcement.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund