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- Title
Drivers of Systemic Banking Crises: The Role of Financial Account Structure and Financial Integration.
- Authors
Ahrend, Rudiger; Goujard, Antoine
- Abstract
This paper examines whether the composition of a country's external liabilities and assets affects its risk of suffering financial turmoil. Using a panel of 184 developed and emerging economies from 1970 to 2009, and looking at the impact of financial account structure in normal times and in situations of bank balance-sheet contagion shocks, we find that the structure of the financial account indeed has an important influence on financial stability. A bias in external liabilities towards debt appears to increase strongly the risk of a systemic banking crisis. Moreover, certain forms of international financial integration, such as integration through international bank lending, amplify contagion shocks and increase crisis risk, particularly in the case of short-term bank debt
- Subjects
BANKING industry; FINANCIAL crises; ACCOUNTING; ECONOMIC structure; ASSETS (Accounting); ECONOMIC shock
- Publication
International Finance, 2014, Vol 17, Issue 2, p135
- ISSN
1367-0271
- Publication type
Article
- DOI
10.1111/infi.12046