The Determinants of Banking Crises: Evidence from Developing and Developed Countries

31 Pages Posted: 15 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

Date Written: September 1997

Abstract

The paper studies the factors associated with the emergence of systemic banking crises in a large sample of developed and developing countries in 1980-94, using a multivariate logit econometric model. The results suggest that crises tend to erupt when the macroeconomic environment is weak, particularly when growth is low and inflation is high. Also, high real interest rates are clearly associated with systemic banking sector problems, and there is some evidence that vulnerability to balance of payments crises has played a role. Countries with an explicit deposit insurance scheme were particularly at risk, as were countries with weak law enforcement.

Keywords: Banking Crises, Financial Fragility, Deposit Insurance

JEL Classification: E44, G21

Suggested Citation

Demirgüç-Kunt, Asli and Detragiache, Enrica, The Determinants of Banking Crises: Evidence from Developing and Developed Countries (September 1997). IMF Working Paper, Vol. , pp. 1-31, 1997. Available at SSRN: https://ssrn.com/abstract=882631

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

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