Macro Financial Determinants of the Great Financial Crisis: Implications for Financial Regulation
43 Pages Posted: 21 Oct 2010 Last revised: 22 Jun 2011
Date Written: October 21, 2010
By analysing the macro financial determinants of the Great Financial Crisis of 2007-2009 on 83 countries, we find that the probability of suffering the crisis in 2008 was larger for countries having higher levels of credit deposit ratio whereas it was lower for countries having higher levels of: i) net interest margin, ii) concentration in the banking sector, iii) restrictions to bank activities, iv) private monitoring. Our findings contribute to the ongoing discussion that can help policymakers calibrate new regulation, by achieving a reasonable trade-off between financial stability and economic growth.
Keywords: Banking Crisis, Government Intervention, Regulation
JEL Classification: G15, G18, G21
Suggested Citation: Suggested Citation