A Chronicle of the Banking and Currency Crises

Posted: 30 Mar 2005

See all articles by Sotiris K. Staikouras

Sotiris K. Staikouras

City University - Cass Business School; ALBA Graduate Business School


The paper surveys the research undertaken in the area of banking and currency crises. The causes and implications of the twin crises are discussed, along with the theoretical and empirical framework for investigating them. The overview has highlighted a number of interesting aspects. A consistent set of economic indicators is identified as being able to predict possible financial jitters. Non-quantified factors such as expectations, herding behaviour and contagion are also crucial beyond and above economic fundamentals. The direction of the twin crises' causality is not clearly established yet. It is usually a banking crisis that precedes a currency downfall, with the latter creating a vicious spiral. Finally, a few other points are identified as issues of future concern.

Keywords: Banking crises, Currency crashes, Modelling default, Early warning indicators

JEL Classification: F21, F31, G15, G21

Suggested Citation

Staikouras, Sotiris, A Chronicle of the Banking and Currency Crises. Applied Economics Letters, Vol. 11, 873-878, 2004, Available at SSRN: https://ssrn.com/abstract=679463

Sotiris Staikouras (Contact Author)

City University - Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

ALBA Graduate Business School ( email )

Athinas Ave. & 2A Areos Str.
Vouliagmeni 166 71, Athens

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