Bank regulation, property prices and early warning systems for banking crises in OECD countries

Ray Barrell, E Davis (), Dilruba Karim and Iana Liadze

Journal of Banking & Finance, 2010, vol. 34, issue 9, 2255-2264

Abstract: Early warning systems (EWS) for banking crises generally omit bank capital, bank liquidity and property prices. Most work on EWS has been for global samples dominated by emerging market crises where time series data on bank capital adequacy and property prices are typically absent. We estimate logit crisis models for OECD countries, finding strong effects from capital adequacy and liquidity ratios as well as property prices, and can exclude traditional variables. Higher capital adequacy and liquidity ratios have a marked effect on the crisis probabilities, implying long-run benefits to offset some of the costs that such regulations may impose.

Keywords: Banking; crises; Systemic; risk; Early; warning; systems; Logit; estimation; Bank; regulation; Capital; adequacy; Liquidity; regulation (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (174)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378-4266(10)00079-8
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Bank regulation, property prices and early warning systems for banking crises in OECD countries (2009)
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:eee:jbfina:v:34:y:2010:i:9:p:2255-2264

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().