Determinants of the Real Impact of Banking Crises: A Review and New Evidence

32 Pages Posted: 12 Aug 2014

See all articles by Philip Wilms

Philip Wilms

De Nederlandsche Bank - Research Department

Job Swank

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); De Nederlandsche Bank

Jakob de Haan

University of Groningen - Faculty of Economics and Business; CESifo (Center for Economic Studies and Ifo Institute); De Nederlandsche Bank

Date Written: August 11, 2014

Abstract

We examine which variables are robust in explaining cross-country differences in the real impact of systemic banking crises. Based on a meta-analysis, we identify 21 variables frequently used as determinants of the severity of crises. Employing nine proxies for crisis severity, we find that large current account imbalances are the most robust determinant of the real impact of banking crises. Countries with a high GDP per capita have more prolonged downfalls after the occurrence of a banking crisis. Exchange rate developments and pre-crisis GDP growth are related to the peak-to-trough impact of a banking crisis.

Keywords: banking crises, real impact of crises, duration of crises

JEL Classification: F03, G01, G18

Suggested Citation

Wilms, Philip and Swank, Job and de Haan, Jakob, Determinants of the Real Impact of Banking Crises: A Review and New Evidence (August 11, 2014). De Nederlandsche Bank Working Paper No. 437, Available at SSRN: https://ssrn.com/abstract=2479213 or http://dx.doi.org/10.2139/ssrn.2479213

Philip Wilms (Contact Author)

De Nederlandsche Bank - Research Department ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

Job Swank

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P O Box 1738
3062 PA Rotterdam
Netherlands

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Jakob De Haan

University of Groningen - Faculty of Economics and Business ( email )

PO Box 800
Groningen, 9700 AV
Netherlands
+31 0 50 3633706 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

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