Capital account openness and early warning system for banking crises in G20 countries

Xiao Qin and Chengying Luo

Economic Modelling, 2014, vol. 39, issue C, 190-194

Abstract: This paper develops an early warning system for banking crises in the G20 countries, with the inclusion of capital account openness indicators. Results suggest that the capital account openness demonstrates a significant predictive power on systemic banking crises, and the impact is related with the level of the economic development. For low-income countries, increased capital account openness has a significantly negative impact on the banking crises likelihoods, while for high-income countries it imposes a positive impact. For middle-income countries, however, the occurrence of banking crises is more indifferent to capital account liberalization.

Keywords: Banking crises; Capital account openness; Early warning system; Systemic risk; Panel logit regression (search for similar items in EconPapers)
JEL-codes: C23 G01 G21 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:39:y:2014:i:c:p:190-194

DOI: 10.1016/j.econmod.2014.02.037

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