On the duration of the financial system stability under liberalization

This paper represents an econometric attempt to deal with the issue of financial system stability in a framework of duration models, using macroeconomic data. A salient result is that banking crises are likely to occur every 10 years or so, even if the financial system has been stable until the year...

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Bibliographic Details
Published in:	Emerging markets review Vol. 7; no. 2; pp. 147 - 161
Main Author:	Aka, Brou E.
Format:	Journal Article
Language:	English
Published:	Amsterdam Elsevier B.V 01-06-2006 Elsevier Elsevier BV
Series:	Emerging Markets Review
Subjects:	Banking crises Duration models Econometrics Economic crisis Emerging markets Finance Financial liberalization Studies Systems stability Financial liberalization C41 G21 Duration models G28 E4 Banking crises
Online Access:	Get full text
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Summary:	This paper represents an econometric attempt to deal with the issue of financial system stability in a framework of duration models, using macroeconomic data. A salient result is that banking crises are likely to occur every 10 years or so, even if the financial system has been stable until the year before the crises. Indeed, the risk of banking crises builds up during a calm period. The results also reveal that factors such as fundamentals weakness, structural characteristics, contagion phenomenon and past experiences with banking crises play an important role.
ISSN:	1566-0141 1873-6173
DOI:	10.1016/j.ememar.2006.01.002