Credit Booms, Financial Fragility and Banking Crises
David Fielding () and
No 1507, Working Papers from University of Otago, Department of Economics
Recent evidence indicates that surges in capital inflows and credit booms can increase the probability of a subsequent banking crisis. Using a new country-level panel database on financial fragility, we take this analysis further by exploring the interaction of surges, booms and fragility. We find that booms and fragility are both important, but booms increase the probability of a crisis only in financial systems with a relatively high level of fragility. Booms appear not to be dangerous in countries with a robust banking system.
Keywords: Panel data; Financial crises; Financial fragility; Credit booms; Capital surges (search for similar items in EconPapers)
JEL-codes: E44 G01 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2015-08, Revised 2015-08
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Journal Article: Credit booms, financial fragility and banking crises (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:otg:wpaper:1507
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