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IMF Lending and Banking Crises

Luca Papi (), Andrea Presbitero and Alberto Zazzaro ()

No 15/19, IMF Working Papers from International Monetary Fund

Abstract: This paper looks at the effects of International Monetary Fund (IMF) lending programs on banking crises in a large sample of developing countries, over the period 1970-2010. The endogeneity of the IMF intervention is addressed by adopting an instrumental variable strategy and a propensity score matching estimator. Controlling for the standard determinants of banking crises, our results indicate that countries participating in IMF-supported lending programs are significantly less likely to experience a future banking crisis than nonborrowing countries. We also provide evidence suggesting that compliance with conditionality and loan size matter.

Keywords: Banking crisis; Banking crises; Cross country analysis; Crisis prevention; Conditionality; Developing countries; Financial crises; IMF Lending; IMF Programs; Intervention; Political economy; lending, liquidity, International Monetary Arrangements and Institutions, International Lending and Debt Problems, Macroeconomic Analyses of Economic Development, (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba
Date: 2015-01-26
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Journal Article: IMF Lending and Banking Crises (2015) Downloads
Working Paper: IMF Lending and Banking Crises (2013) Downloads
Working Paper: IMF Lending and Banking Crises (2013) Downloads
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