Logo
Munich Personal RePEc Archive

Regulatory Lags, Liberalization, and Vulnerability to Systemic Banking Crises

Garriga, Ana Carolina (2011): Regulatory Lags, Liberalization, and Vulnerability to Systemic Banking Crises.

[thumbnail of MPRA_paper_59154.pdf]
Preview
PDF
MPRA_paper_59154.pdf

Download (1MB) | Preview

Abstract

What factors make countries vulnerable to banking crises? Particularly, how do reforms in regulation affect the likelihood of banking crises’ onset? Several recent articles describe the “anatomy” of banking crises. However, the economic indicators that precede these crises do not necessarily imply causality. Furthermore, the broader literature on financial crises finds a set of institutional causal factors to be important for financial crises, but these factors likely do not apply to banking crises. In the last 20 years banking crises have affected countries that should be impervious to them, while countries at risk have been surprisingly resilient. I argue that differences in vulnerability to banking crises are a result of the asymmetry between financial market evolution and regulation update. Although regulation tends to follow the developments in the financial market everywhere, lags in regulation have different effects at different levels of financial market liberalization. This paper analyzes the interactions between financial market liberalization and regulation update on a world-wide sample between 1973 and 2006.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.