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IMF Lending and Banking Crises
Author:
Luca Papi null

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Mr. Andrea F Presbitero
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https://orcid.org/0000-0003-4622-941X
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Alberto Zazzaro null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2015: Issue 019
Language:
English
Publication Date:
26 Jan 2015
DOI:
https://doi.org/10.5089/9781484308691.001
ISBN:
9781484308691
ISSN:
1018-5941
Pages:
56
Keywords:
WP; banking crisis; IMF arrangement; IMF program; IMF intervention; Banking crises; IMF programs; Political economy; Conditionality; IMF emergency liquidity provision; IMF loan agreement; IMF activity; IMF support; liquidity provision; lending arrangement; IMF presence; IMF rescue package; Systemic crises; Loans; Currency crises; Global
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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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This paper looks at the effects of International Monetary Fund (IMF) lending programs on banking crises in a large sample of developing countries, over the period 1970-2010. The endogeneity of the IMF intervention is addressed by adopting an instrumental variable strategy and a propensity score matching estimator. Controlling for the standard determinants of banking crises, our results indicate that countries participating in IMF-supported lending programs are significantly less likely to experience a future banking crisis than nonborrowing countries. We also provide evidence suggesting that compliance with conditionality and loan size matter.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund