The Breakdown of Credit Relations Under Conditions of a Banking Crisis: A Switching Regime Approach

Sònia Muñoz

No 2000/135, IMF Working Papers from International Monetary Fund

Abstract: This paper empirically analyzes the effects of a banking crisis on bank credit to the private sector for a panel of developing, developed, and transition economies for the period 1970-1998. The model illustrates how the behavior of the bank credit function changes during a banking crisis, reflecting a generalized disruption in the stability of behavioral parameters. Usual links such as interest rate signaling for lending, and synergy between deposits and loans, fall apart. Moreover, this study gives support to Third Generation Models in their ability to predict banking crises. Based on the empirical findings, the paper then provides policy implications for monetary policy.

Keywords: WP; banking crisis; private sector; Bank Supply of Credit; Banking Crises; Monetary Policy Instruments; banking policy; business variable; banking activity; banking business variable; discount window; lending boom; banking distress; bank credit to the private sector; occurrence of a banking crisis; lending interest rate variable; forthcoming banking crisis; sterilized discount window lending; Bank credit; Credit; Open market operations; Currency crises (search for similar items in EconPapers)
Pages: 24
Date: 2000-07-01
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=3702 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2000/135

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

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.
Bibliographic data for series maintained by Akshay Modi ().