Banking Crises in Historical Perspective

Carola Frydman and Chenzi Xu

No 31092, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This article surveys the recent empirical literature on historical banking crises, defined as events taking place before 1980. Advances in data collection and identification have provided new insights into the causes and consequences of crises both immediately and over the long run. We highlight three overarching threads that emerge from the literature: first, leverage in the financial system is a systematic precursor to crises; second, crises have sizable negative effects on the real economy; and third, government interventions can ameliorate these effects. Contrasting historical episodes reveals that the process of crisis formation and evolution varies significantly across time and space. Thus, we also highlight specific institutions, regulations and historical contexts that give rise to these divergent experiences. We conclude by identifying important gaps in the literature and discussing avenues for future research.

JEL-codes: E44 E58 G01 G21 N10 N20 (search for similar items in EconPapers)
Date: 2023-03
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fdg, nep-his, nep-mac and nep-pay
Note: CF DAE IFM
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Citations: View citations in EconPapers (1)

Published as Carola Frydman & Chenzi Xu, 2023. "Banking Crises in Historical Perspective," Annual Review of Financial Economics, vol 15(1).

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