The Corporate Sector Dynamics of Systemic Financial Crises
44 Pages Posted: 1 Feb 2006
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: Suggested Citation
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