Cross-Country Empirical Studies of Systemic Bank Distress: A Survey
33 Pages Posted: 3 Mar 2006
Date Written: May 2005
A rapidly growing empirical literature is studying the causes and consequences of bank fragility in present-day economies. The paper reviews the two basic methodologies adopted in cross-country empirical studiesthe signals approach and the multivariate probability modeland their application to studying the determinants of banking crises. The use of these models to provide early warnings for crises is also reviewed, as are studies of the economic effects of banking crises and of the policies to forestall them. The paper concludes by identifying directions for future research.
Keywords: Banking crises, financial fragility
JEL Classification: E44, G21
Suggested Citation: Suggested Citation