Banking Crises and the Rules of the Game

Charles W. Calomiris

Working Papers from Czech National Bank, Research and Statistics Department

Abstract: This paper is aimed to address when and why do banking crises occur, and whether financial reforms in reaction to crises are generally beneficial. It is argued that banking crises properly defined consist either of panics or of waves of costly bank failures, and they do not necessarily coincide. Risk-inviting microeconomic rules of the banking game that are established by government are viewed as the key necessary condition to producing a propensity for banking distress, whether in the form of a high propensity for banking panics or a high propensity for waves of bank failures.

Keywords: Banking; banking crises; financial reforms; microeconomic rules. (search for similar items in EconPapers)
JEL-codes: E5 E58 G2 N2 (search for similar items in EconPapers)
Date: 2009-12
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2009/14

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