The twin crises: the causes of banking and balance-of-payments problems

Graciela Kaminsky () and Carmen Reinhart

No 544, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: In the wake of the ERM and Mexican currency crises, the subject of balance-of-payments crises has come to the forefront of academic and policy discussions. This paper focuses on the potential links between banking and balance-of-payments crises. We examine these episodes for a large number of countries and find that knowing that there are banking problems helps in predicting balance-of-payments crises, but the converse is not true; financial liberalization usually predates banking crises, indeed, it helps predict them. Rather than a causal relationship from banking to balance-of-payments crises, the macroeconomic \"stylized facts\" that characterize these episodes point to common causes.

Keywords: Balance of payments; Bank failures (search for similar items in EconPapers)
Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (621)

Downloads: (external link)
http://www.federalreserve.gov/pubs/ifdp/1996/544/default.htm (text/html)
http://www.federalreserve.gov/pubs/ifdp/1996/544/ifdp544.pdf (application/pdf)

Related works:
Journal Article: The Twin Crises: The Causes of Banking and Balance-of-Payments Problems (1999)
Working Paper: The twin crises: The causes of banking and balance of payments problems (1999)
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:fip:fedgif:544

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().