scholarly journals How Bad Are Twins? Output Costs of Currency and Banking Crises

2005 ◽  
Vol 37 (4) ◽  
pp. 725-752 ◽  
Author(s):  
Michael M. Hutchison ◽  
Ilan Noy
Keyword(s):  
Banking Crises ◽  
Output Costs

Stock markets and the costs of banking crises

2014 ◽  
Vol 6 (4) ◽  
pp. 342-361 ◽  
Author(s):  
Tess DeLean ◽  
Joseph P. Joyce
Keyword(s):  
Stock Markets ◽  
Empirical Investigation ◽  
Equity Markets ◽  
Banking Crises ◽  
Regulatory Oversight ◽  
Content Type ◽  
Output Losses ◽  
The Impact ◽  
Practical Implications ◽  
Output Costs

Purpose – This paper aims to investigate whether stock markets can reduce the output costs of banking crises. The work is motivated by Alan Greenspan’s claim that capital markets serve as a financial “spare tire” in the event of a banking crisis. Design/methodology/approach – We test the impact of stock market capitalization, liquidity and turnover on the output losses of 76 banking crises in 66 countries over the period of 1975-2008. Findings – Our results indicate that stock markets can mitigate the effect of banking crises on economic activity. There is also some evidence that foreign equity holdings lower output costs. Practical implications – These results suggest that the development of equity markets will contribute to reducing the costs of banking crises. Such development, however, should be accompanied by adequate supervisory and regulatory oversight. Originality/value – Our analysis is the first direct empirical investigation of the impact of stock markets on the output costs of banking crises. This paper demonstrates that equity markets can lessen the severity of such crises.

Russian Banking System under Conditions of Global Crisis

2009 ◽  
pp. 4-14 ◽  
Author(s):  
G. Gref ◽  
K. Yudaeva
Keyword(s):  
Banking System ◽  
Commodity Prices ◽  
Financial Sector ◽  
Banking Crises ◽  
Economic Recovery ◽  
Balance Sheets ◽  
Current Economic Crisis ◽  
Risk Appetite ◽  
The Us ◽  
The Face

Problems in the financial sector were at the core of the current economic crisis. Therefore, economic recovery will only become sustainable after taking care of the major weaknesses in the financial sector. This conclusion is relevant both for the US and UK - the two countries where crisis has started, and for other economies which financial institutions turned out to be fragile in the face of the swings in the risk appetite. Russia is one of the countries where the crisis has revealed serious deficiency in the financial sector. Our study of 11 banking crises during the last 25-30 years shows that sustainable economic recovery and decrease in the dependence on commodity prices will be virtually impossible without cleaning of balance sheets and capitalization of the financial sector.

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