Managing the Real and Fiscal Effects of Banking Crises

The study provides two recent analyses, spurred by the recent East Asian crisis, of government responses to financial distress, and, also presents a comprehensive database on systemic, and borderline banking crises. In the first chapter, the authors review the tradeoffs involved in public policies for systemic, financial, and corporate sector restructuring. They find that consistent policies are crucial for success, though such consistency is often missing. This consistency covers many dimensions, and entails among other things, ensuring that there are sufficient resources for absorbing losses, and, that private agents face appropriate incentives for restructuring. The authors also find that sustainable restructuring, requires deep structural reforms, facing upfront, political economy factors. In the second chapter, the authors use cross-country evidence to determine whether specific crisis containment, and resolution policies, systematically influence the fiscal costs of resolving a crisis. They find that accommodating policies - such as blanket deposit guarantees, debtor bailouts, and regulatory forbearance, etc. - significantly increase fiscal costs. The third chapter, is a comprehensive database on systemic banking crises that have occurred since the late 1970s. The database also includes information on borderline (non-systemic) banking crises during the same period.

Bibliographic Details

Main Authors:	Klingbiel, Daniela, Laeven, Luc
Language:	English en_US
Published:	Washington, DC: World Bank 2002-01
Subjects:	ASSET MANAGEMENT, ASSET PRICES, ASSET SALES, AUTHORITY, BANK CREDIBILITY, BANK CRISES, BANK MANAGEMENT, BANK RESTRUCTURING, BANKING CRISES, BANKING CRISIS, BANKING SECTOR, BANKRUPTCY, BANKRUPTCY LAWS, BANKS, BLANKET DEPOSIT GUARANTEES, CAPITAL ADEQUACY, CAPITAL ADEQUACY RULES, CAPITAL BASE, CAPITAL FLOWS, COMPETITIVENESS, CONTAINMENT PHASE, CORPORATE GOVERNANCE, CORPORATE RESTRUCTURING, CORPORATE SECTOR, COURT RESTRUCTURING, CURRENCY CRISES, DEBT, DEBT OVERHANG, DEPOSIT GUARANTEES, DEPOSITORS, DEPOSITS, DISCLOSURE, ECONOMIC GROWTH, EMERGING MARKETS, EMPLOYMENT, ENABLING ENVIRONMENT, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL DISCIPLINE, FINANCIAL DISTRESS, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL RESTRUCTURING, FINANCIAL SECTOR, FINANCIAL SECTORS, FINANCIAL STABILITY, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FISCAL, FISCAL COSTS, FISCAL POLICY, FISCAL RESOURCES, FOREIGN ENTRY, FOREIGN EXCHANGE, FOREIGN INVESTORS, FRAUD, GAMBLING, GOVERNANCE INSTITUTIONS, GOVERNMENT EQUITY, GOVERNMENT POLICIES, GOVERNMENT RESOURCES, HARD BUDGET CONSTRAINTS, HUMAN DEVELOPMENT, INCENTIVE FRAMEWORK, INFLATION, INSOLVENCY, INSOLVENCY SYSTEM, INSOLVENT, INSOLVENT BANKS, INSTITUTIONAL CAPACITY, INSTITUTIONAL FRAMEWORK, INSTITUTIONAL WEAKNESSES, INTEREST RATES, JUDICIARY, LAWS, LIQUIDATION, LIQUIDITY, LOCAL GOVERNMENT, LOOTING, LOSS ALLOCATION, MACROECONOMIC STABILITY, MARKET ECONOMY, MARKET VALUE, MATURITIES, MICROFINANCE, MONETARY POLICY, MORAL HAZARD, NATIONAL ECONOMY, NONPERFORMING LOANS, PENALTIES, POLITICAL ECONOMY, PRIVATIZATION, PROFITABILITY, PUBLIC EXPENDITURE, PUBLIC FINANCE, PUBLIC POLICIES, PUBLIC SECTOR, REAL SECTOR, RECAPITALIZATION, REGULATORY FORBEARANCE, REGULATORY INTERVENTION, REHABILITATION, REORGANIZATION, RESERVE REQUIREMENT, RISK SHARING, RISK TAKING, RUNS ON BANKS, SAFETY NETS, SENATE, SHAREHOLDERS, SOCIAL SERVICES, SUBSIDIARIES, SYSTEMIC BANKING CRISES, TRANSITION ECONOMIES, TRANSPORT, WAGES, WORKING CAPITAL,
Online Access:	http://documents.worldbank.org/curated/en/2002/01/1717448/managing-real-fiscal-effects-banking-crises https://hdl.handle.net/10986/14057
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