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How to foresee banking crises? A survey of the empirical literature

Karlo Kauko

Economic Systems, 2014, vol. 38, issue 3, 289-308

Abstract: A survey of the empirical literature on early warning indicators of banking crises is presented. Descriptive analyses have been published for decades, but cross-national panel data analyses have only been performed since the late 1990s. More recently, the severity of the subprime-Lehman crisis has been compared across countries. Most findings corroborate the view that during a typical build-up phase, banks borrow internationally to finance domestic lending, boosting the current account deficit and causing a real estate bubble. Increasing debt and imbalances lead to a crisis. Both developing and developed countries have experienced these kinds of boom-bust cycles.

Keywords: Banking crisis; Financial crisis; Early warning; Financial instability (search for similar items in EconPapers)
JEL-codes: E44 G01 G17 N10 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:38:y:2014:i:3:p:289-308

DOI: 10.1016/j.ecosys.2014.01.001

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