Leading Indicators of Banking Crises: Was Asia Different?

International Monetary Fund

No 1998/091, IMF Working Papers from International Monetary Fund

Abstract: This paper examines episodes of the banking system distress and crisis in a large sample of countries. The empirical results identify several macroeconomic and financial variables as useful leading indicators. The main macroeconomic indicators were of limited value in predicting the Asian crises; the best warning signs were proxies for the vulnerability of the banking and corporate sector. Full-blown banking crises are shown to be more associated with external developments, and domestic variables are the main leading indicators of severe but contained banking distress.

Keywords: WP; banking crisis; banking system distress; exchange rate; banking system crisis; banking sector difficulty; Banking crises; leading indicators; East Asia; banking sector difficulties; banking sector distress; banking sector fragility; banking sector variable; banking sector crisis; banking sector problem; banking system difficulties; Commercial banks; Real interest rates; Real effective exchange rates; Asia and Pacific (search for similar items in EconPapers)
Pages: 32
Date: 1998-06-01
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Citations: View citations in EconPapers (57)

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