Cross-Country Experiences and Policy Implications from the Global Financial Crisis

27 Pages Posted: 5 Apr 2010

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Giovanni Dell’Ariccia

affiliation not provided to SSRN

Deniz Igan

International Monetary Fund (IMF) - Financial Studies Division

Luc Laeven

European Central Bank (ECB); Centre for Economic Policy Research (CEPR)

Abstract

The financial crisis of 2007--2008 is rooted in a number of factors, some common to previous financial crises, others new. Analysis of post-crisis macroeconomic and financial sector performance for 58 advanced countries and emerging markets shows a differential impact of old and new factors. Factors common to other crises, like asset price bubbles and current account deficits, help to explain cross-country differences in the severity of real economic impacts. New factors, such as increased financial integration and dependence on wholesale funding, help to account for the amplification and global spread of the financial crisis. Our findings point to vulnerabilities to be monitored and areas of needed national and international reforms to reduce risk of future crises and cross-border spillovers. They also reinforce a (sad) state of knowledge: much of how crises start and spread remains unknown.

Suggested Citation

Claessens, Stijn and Dell’Ariccia, Giovanni and Igan, Deniz and Laeven, Luc A., Cross-Country Experiences and Policy Implications from the Global Financial Crisis. Economic Policy, Vol. 25, Issue 62, pp. 267-293, April 2010, Available at SSRN: https://ssrn.com/abstract=1583158 or http://dx.doi.org/10.1111/j.1468-0327.2010.00244.x

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Giovanni Dell’Ariccia

affiliation not provided to SSRN

No Address Available

Deniz Igan

International Monetary Fund (IMF) - Financial Studies Division ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Luc A. Laeven

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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