Currency Crises and the Real Economy: The Role of Banks

Piti Disyatat

No 2001/049, IMF Working Papers from International Monetary Fund

Abstract: This paper shows that the quality of banks within each country is one of the important factors that can account for the fact that developing economies tend to suffer more severe output contractions in the wake of a currency crisis than more mature economies. In particular, countries with a banking sector whose balance sheets are healthy, in terms of having high net worth and low foreign currency exposure, are much less likely to suffer a contraction in the wake of an unexpected depreciation.

Keywords: WP; cost of funds; banking sector; currency crisis; banking crisis; foreign currency debt; balance sheet; output; domestic bank; banks fail; representative bank; bank lending channel; bank scope database; Financial statements; Depreciation; Commercial banks; Currency crises; Employment; Asia and Pacific (search for similar items in EconPapers)
Pages: 29
Date: 2001-05-01
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Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Currency crises and the real economy: The role of banks (2004)
Working Paper: Currency Crises and the Real Economy: The Role of Banks (2002)
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