 Systemic Risk Assessment in Low Income Countries: Balancing Financial Stability and DevelopmentDaniela Marchettini and Rodolfo Maino No 2015/190, IMF Working Papers from International Monetary Fund Abstract: We propose a toolkit for the assessment of systemic risk buildup in low income countries. We show that, due to non-linearity in the relationship between credit and financial stability, the assessment should be conducted with different tools at different stages of financial development. In particular, when the level of financial depth is low, traditional leading indicators of banking crises have poor predictive performance and the analysis should be based on indicators that account for financial deepening while taking into consideration countries’ structural limits. By using this framework, we provide a preliminary assessment of systemic risk buildup in individual SSA countries. Keywords: Early Warning Indicators; Financial Deepening; Systemic Risk; Sub-Saharan Africa; banking crisis; credit growth; excess credit; credit gap measure; frontier gap; credit standard; credit bubble; Credit; Financial sector development; Credit booms; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2015/190 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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