Macro Financial Determinants of the Great Financial Crisis: Implications for Financial Regulation

Caprio, Gerard; D'Apice, Vincenzo; Ferri, Giovanni; Puopolo, Giovanni Walter

doi:10.2139/ssrn.1788063

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Macro Financial Determinants of the Great Financial Crisis: Implications for Financial Regulation

46 Pages Posted: 23 Mar 2011 Last revised: 7 Jul 2014

See all articles by Gerard Caprio

Vincenzo D'Apice

Center for Relationship Banking and Economics

Giovanni Walter Puopolo

CSEF - University of Naples Federico II; CSEF - University of Naples Federico II - Centre for Studies in Economics and Finance (CSEF)

There are 2 versions of this paper

Date Written: January 25, 2014

Abstract

We investigate the macro financial determinants of the Great Financial Crisis of 2007-2009 using data on 83 countries from the period 1998-2006. Our results show 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

Caprio, Gerard and D'Apice, Vincenzo and Ferri, Giovanni and Puopolo, Giovanni Walter, Macro Financial Determinants of the Great Financial Crisis: Implications for Financial Regulation (January 25, 2014). Available at SSRN: https://ssrn.com/abstract=1788063 or http://dx.doi.org/10.2139/ssrn.1788063