Resolving Systemic Financial Crises

Author : Daniela Klingebiel
Publisher : World Bank Publications
Page : 38 pages
File Size : 46,6 Mb
Release : 2004
Category : Banks and banking
ISBN : 9782004090713

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Resolving Systemic Financial Crises by Daniela Klingebiel Pdf

"Claessens, Klingebiel, and Laeven analyze the role of institutions in resolving systemic banking crises for a broad sample of countries. Banking crises are fiscally costly, especially when policies like substantial liquidity support, explicit government guarantees on financial institutions' liabilities, and forbearance from prudential regulations are used. Higher fiscal outlays do not, however, accelerate the recovery from a crisis. Better institutions--less corruption, improved law and order, legal system, and bureaucracy--do. The authors find these results to be relatively robust to estimation techniques, including controlling for the effects of a poor institutional environment on the likelihood of financial crisis and the size of fiscal costs. Their results suggest that countries should use strict policies to resolve a crisis and use the crisis as an opportunity to implement medium-term structural reforms, which will also help avoid future systemic crises. This paper--a product of the Financial Sector Operations and Policy Department--is part of a larger effort in the department to study financial crisis resolution"--World Bank web site.

Author : Stijn Claessens
Publisher : Unknown
Page : 38 pages
File Size : 54,9 Mb
Release : 2016
Category : Electronic
ISBN : OCLC:1290705074

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Resolving Systemic Financial Crises by Stijn Claessens Pdf

Claessens, Klingebiel, and Laeven analyze the role of institutions in resolving systemic banking crises for a broad sample of countries. Banking crises are fiscally costly, especially when policies like substantial liquidity support, explicit government guarantees on financial institutions' liabilities, and forbearance from prudential regulations are used. Higher fiscal outlays do not, however, accelerate the recovery from a crisis. Better institutions - less corruption, improved law and order, legal system, and bureaucracy - do. The authors find these results to be relatively robust to estimation techniques, including controlling for the effects of a poor institutional environment on the likelihood of financial crisis and the size of fiscal costs. Their results suggest that countries should use strict policies to resolve a crisis and use the crisis as an opportunity to implement medium-term structural reforms, which will also help avoid future systemic crises.This paper - a product of the Financial Sector Operations and Policy Department - is part of a larger effort in the department to study financial crisis resolution.

Author : Douglas Darrell Evanoff,George G. Kaufman
Publisher : World Scientific
Page : 474 pages
File Size : 46,9 Mb
Release : 2005
Category : Business & Economics
ISBN : 9789812563484

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Systemic Financial Crises by Douglas Darrell Evanoff,George G. Kaufman Pdf

Bank failures, like illness and taxes, are almost a certainty at some time in the future. What is less certain is their cost to and adverse implications for macroeconomies. Past failures have frequently been resolved at very high cost to society. However, the cost could be reduced through having a well-developed, credible and widely publicized plan ready to put into action by policymakers. If no such plan is ready when a large bank approaches insolvency, political pressures are likely to influence the response of regulators.Minimizing immediate, short-run costs are likely to outweigh minimizing further out, longer-run and longer-lasting costs, even if these delayed costs promise to be substantially greater. Stated differently, today will win out over tomorrow and politics will trump economics. How best to prevent such unfavorable outcomes is the major theme of this volume. The articles presented review past insolvency resolutions, draw lessons from these resolutions, discuss impediments to efficient resolutions ? including cross-country, cross-regulator, and institutional challenges ? and recommend how to move forward.

Author : Ms.Marina Moretti,Mr.Marc C Dobler,Mr.Alvaro Piris Chavarri
Publisher : International Monetary Fund
Page : 88 pages
File Size : 43,6 Mb
Release : 2020-02-11
Category : Business & Economics
ISBN : 9781513512273

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Managing Systemic Banking Crises by Ms.Marina Moretti,Mr.Marc C Dobler,Mr.Alvaro Piris Chavarri Pdf

This paper updates the IMF’s work on general principles, strategies, and techniques from an operational perspective in preparing for and managing systemic banking crises in light of the experiences and challenges faced during and since the global financial crisis. It summarizes IMF advice concerning these areas from staff of the IMF Monetary and Capital Markets Department (MCM), drawing on Executive Board Papers, IMF staff publications, and country documents (including program documents and technical assistance reports). Unless stated otherwise, the guidance is generally applicable across the IMF membership.

Author : Mr.Luc Laeven,Mr.Fabian Valencia
Publisher : International Monetary Fund
Page : 48 pages
File Size : 42,6 Mb
Release : 2018-09-14
Category : Business & Economics
ISBN : 9781484377048

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Systemic Banking Crises Revisited by Mr.Luc Laeven,Mr.Fabian Valencia Pdf

This paper updates the database on systemic banking crises presented in Laeven and Valencia (2008, 2013). Drawing on 151 systemic banking crises episodes around the globe during 1970-2017, the database includes information on crisis dates, policy responses to resolve banking crises, and the fiscal and output costs of crises. We provide new evidence that crises in high-income countries tend to last longer and be associated with higher output losses, lower fiscal costs, and more extensive use of bank guarantees and expansionary macro policies than crises in low- and middle-income countries. We complement the banking crises dates with sovereign debt and currency crises dates to find that sovereign debt and currency crises tend to coincide or follow banking crises.

Author : Patrick Honohan,Luc Laeven
Publisher : Cambridge University Press
Page : 412 pages
File Size : 44,5 Mb
Release : 2005-09-26
Category : Business & Economics
ISBN : 0521851858

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Systemic Financial Crises by Patrick Honohan,Luc Laeven Pdf

This book analyzes government policies to contain and resolve systemic financial crises.

Author : Daniela Klingebiel,Luc Laeven
Publisher : World Bank Publications
Page : 68 pages
File Size : 45,8 Mb
Release : 2002
Category : Business & Economics
ISBN : 0821350560

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Managing the Real and Fiscal Effects of Banking Crises by Daniela Klingebiel,Luc Laeven Pdf

This volume provides two recent analyses of government responses to financial crises; they have been developed in the light of the recent East Asian crisis, but also draw on experiences from other regions. Issues discussed relate to: the tradeoffs involved in public policies for systemic financial and corporate sector restructuring; and the use of cross-country evidence to determine whether specific crisis containment and resolution policies effect the fiscal costs of resolving a crisis. The book also presents information on 113 systemic banking crises that have occurred in 93 countries since the 1970s, as well as 50 borderline or non-systemic banking crises in 44 countries during the same period.

Author : Mr.Marc Quintyn,Mr.David S. Hoelscher
Publisher : International Monetary Fund
Page : 73 pages
File Size : 54,9 Mb
Release : 2003-08-28
Category : Business & Economics
ISBN : 9781589062245

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Managing Systemic Banking Crises by Mr.Marc Quintyn,Mr.David S. Hoelscher Pdf

Recent financial sector crises and their resolution have raised new issues and provided additional experiences to draw on in the future. Banking sector problems in Russia, Turkey, and a few Latin American countries occurred within the context of highly dollarized economies, high levels of sovereign debt, severely limited fiscal resources, or combinations thereof. These factors have challenged the effectiveness of many of the typical tools for bank resolution. This publication focuses on the issues raised in systemic crises, not on the resolution of individual bank problems. Based on the lessons learned during the Asian crisis, it updates the IMF’s work on the general principles, strategies, and techniques for managing these crises.

Author : Mr.Luc Laeven,Mr.Fabian Valencia
Publisher : International Monetary Fund
Page : 37 pages
File Size : 51,6 Mb
Release : 2010-06-01
Category : Business & Economics
ISBN : 9781455201297

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Resolution of Banking Crises by Mr.Luc Laeven,Mr.Fabian Valencia Pdf

This paper presents a new database of systemic banking crises for the period 1970-2009. While there are many commonalities between recent and past crises, both in terms of underlying causes and policy responses, there are some important differences in terms of the scale and scope of interventions. Direct fiscal costs to support the financial sector were smaller this time as a consequence of swift policy action and significant indirect support from expansionary monetary and fiscal policy, the widespread use of guarantees on liabilities, and direct purchases of assets. While these policies have reduced the real impact of the current crisis, they have increased the burden of public debt and the size of government contingent liabilities, raising concerns about fiscal sustainability in some countries.

Author : Luc Laeven,Fabian Valencia
Publisher : International Monetary Fund
Page : 80 pages
File Size : 52,9 Mb
Release : 2008-09
Category : Business & Economics
ISBN : IND:30000111371310

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Systemic Banking Crises by Luc Laeven,Fabian Valencia Pdf

We provide new firm-level evidence on the effects of capital account liberalization. Based on corporate foreign-currency credit ratings data and a novel capital account restrictions index, we find that capital controls can substantially limit access to, and raise the cost of, foreign currency debt, especially for firms without foreign currency revenues. As an identification strategy, we exploit, via a difference-in-difference approach, within-country variation in firms' access to foreign currency, measured by whether or not a firm belongs to the nontradables sector. Nontradables firms benefit substantially more from capital account liberalization than others, a finding that is robust to a broad range of alternative specifications.

Author : Patrick Honohan,Luc Laeven
Publisher : Cambridge University Press
Page : 412 pages
File Size : 48,7 Mb
Release : 2005-09-26
Category : Business & Economics
ISBN : 9781107320826

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Systemic Financial Crises by Patrick Honohan,Luc Laeven Pdf

Faced with a systemic financial sector crisis, policymakers need to make difficult choices under pressure. Based on the experience of many countries in recent years, few have been able to achieve a speedy, lasting and low-cost resolution. This volume considers the strengths and weaknesses of the various policy options, covering both microeconomic (including recapitalization of banks, bank closures, subsidies for distressed borrowers, capital adequacy rules and corporate governance and bankruptcy law requirements) and macroeconomic (including monetary and fiscal policy) dimensions. The contributors explore the important but little understood trade-offs that are involved, such as between policies which take effect quickly, those which minimize long-term fiscal and economic costs, and those which create favorable incentives for future stability. Successfully implementing crisis management and crisis resolution policy required attention to detail and a good flow of information.

Author : Robert Dan Brumbaugh Jr
Publisher : Unknown
Page : 446 pages
File Size : 43,7 Mb
Release : 2021-08-06
Category : Business & Economics
ISBN : 1648018521

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The Quartet and Large Systemic Financial Crises by Robert Dan Brumbaugh Jr Pdf

In the past forty years, two financial crises in the United States have threatened economic stability worldwide. Through miraculous good luck, seven individuals directed the resolution of the crises. Four comprise the quartet that resolved the second crisis, and three directed the resolution of the first crisis. The Quartet and Large Systemic Financial Crises tells the story of both. The time between crises has shortened, and the magnitude of the crises has grown. The seeds of the next crisis are already discernable, borne of view that "big banks" caused the most recent crisis. In fact, the cause was bipartisan government policy imposed over decades on the financial system to allocate capital for political purposes in unstable ways. That phenomenon is poised to accelerate in the near future unless something is done to stop it. The Quartet and Large Systemic Financial Crises describes how to forestall the inevitable disaster that would follow.

Author : Marco A Espinosa-Vega,Mr. Steven Russell
Publisher : International Monetary Fund
Page : 48 pages
File Size : 52,7 Mb
Release : 2015-02-27
Category : Business & Economics
ISBN : 9781498344531

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Interconnectedness, Systemic Crises and Recessions by Marco A Espinosa-Vega,Mr. Steven Russell Pdf

This relatively simple model attempts to capture and integrate four widely held views about financial crises. [1] Interconnectedness among financial institutions (banks) can play a major role in precipitating systemic financial crises. [2] Lack of information about the quality of bank portfolios also plays a role in precipitating systemic crises. [3] Financial crises, particularly systemic ones, are often followed by severe, lengthy recessions. [4] Loss of confidence in the financial system is partly responsible for the length and severity of these recessions. In the model, banks make decisions about initiating and liquidating risky loans. Interconnectedness among their asset portfolios can obscure information about these portfolios, causing them to make inefficient decisions about liquidation, and about retention of the managers who assess credit risk. These decisions can increase the depth of recessions, and they can produce systemic financial crises. They can also reduce the effectiveness of future bank risk assessment, increasing the probability of lengthy, severe recessions. The government, acting in the interest of current and future depositors, may wish to increase the transparency of bank portfolios by limiting interconnectedness. The optimal degree of regulation, which may depend on depositors’ degree of risk aversion, may not eliminate financial crises.

Author : United States. General Accounting Office
Publisher : Unknown
Page : 104 pages
File Size : 54,7 Mb
Release : 1997
Category : Capital market
ISBN : STANFORD:36105127345457

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International Financial Crises by United States. General Accounting Office Pdf

Author : Jose de Luna-Martinez
Publisher : World Bank Publications
Page : 66 pages
File Size : 41,6 Mb
Release : 2000-01-01
Category : Business & Economics
ISBN : 0821347233

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Management and Resolution of Banking Crises by Jose de Luna-Martinez Pdf

WBI Learning Resources Series. Water is a vital element for agricultural production and for economic development in general. However, the spatial and temporal distribution of water in Mexico restrains its use. Because of this distribution, it has been necessary to build a large infrastructure to capture, store, and allot this element among water users. Around the world, countries that once promoted more government involvement in irrigation management are adopting new policies that do just the opposite, creating incentives for farmers to take over the management of operations and maintenance, while government agencies focus on improving the management of water at the main system level. Is this just another management fad; or will the pendulum that is now swinging toward greater management control by farmers soon swing back the other way, toward greater state control? This volume reports on four countries where the state's role in irrigation management has undergone fundamental change and where the result has been a much greater management role for farmers. These studies address the political antecedents of participatory irrigation management (PIM) policies, the process of implementing the policies, and the second-generation challenges of sustaining PIM. These experiences will prove useful to policymakers and irrigation professionals who are facing similar challenges in their own countries.