The Corporate Sector Dynamics of Systemic Financial Crises

44 Pages Posted: 1 Feb 2006

See all articles by Mark Stone

Mark Stone

International Monetary Fund (IMF)

Date Written: June 2000

Abstract

This paper puts together a set of stylized facts of the corporate sector dynamics of systemic financial crises based on recent crisis episodes with a view to identifying the key issues and their policy implications. The evidence suggests that corporate crisis dynamics are triggered by a cutoff of capital inflows and are amplified into an historically severe recession by exchange rate depreciation, high interest rates, and current account adjustment. The adverse consequences of these dynamics can be forestalled and assuaged by policies that improve monitoring of the corporate sector and boost nonbank sources of corporate financing.

Keywords: Financial crises, corporate restructuring

JEL Classification: E44, F32, G30

Suggested Citation

Stone, Mark, The Corporate Sector Dynamics of Systemic Financial Crises (June 2000). IMF Working Paper No. 00/114, Available at SSRN: https://ssrn.com/abstract=879852

Mark Stone (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States