Inside the Crisis: An Empirical Analysis of Banking System in Distress

27 Pages Posted: 3 Feb 2006

See all articles by Asli Demirgüç-Kunt

Asli Demirgüç-Kunt

World Bank - Development Research Group; World Bank

Enrica Detragiache

International Monetary Fund (IMF) - European Department

Poonam Gupta

Delhi School of Economics

Date Written: October 2000

Abstract

Using aggregate and bank level data for several countries, the paper studies what happens to the banking system in the aftermath of a banking crisis. Contemporary crises are not accompanied by declines in aggregate bank deposits, and credit does not fall relative to output, although the growth of both deposits and credit slows down substantially. Output recovery begins in the second year after the crisis and is not led by a resumption in credit growth. Banks, including the stronger ones, reallocate their asset portfolio away from loans.

Keywords: Banking crises, bank runs, credit crunch

JEL Classification: G21, E44

Suggested Citation

Demirgüç-Kunt, Asli and Detragiache, Enrica and Gupta, Poonam, Inside the Crisis: An Empirical Analysis of Banking System in Distress (October 2000). IMF Working Paper No. 00/156. Available at SSRN: https://ssrn.com/abstract=879979

Asli Demirgüç-Kunt (Contact Author)

World Bank - Development Research Group ( email )

United States
202-473-7479 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/ademirguckunt/

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Enrica Detragiache

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Poonam Gupta

Delhi School of Economics ( email )

Department of Economics
Delhi University
Delhi, Delhi 110007
India

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