Resolving systemic financial crises : policies and institutions / Daniela Klingebiel, Stijn Claessens, and Luc Laeven.

Format:

Book

Government document

Author/Creator:

Klingebiel, Daniela.

Contributor:

World Bank.

Claessens, Stijn.

Series:

Policy research working papers ; 3377.

World Bank e-Library.

Policy research working paper ; 3377

Language:

English

Subjects (All):

Banks and banking--Case studies.

Banks and banking.

Financial crises--Case studies.

Financial crises.

Other Title:

Policy research working paper vol. 3377

Place of Publication:

[Washington, D.C. : World Bank, 2004]

System Details:

data file

Summary:

"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.

Notes:

Title from PDF file as viewed on 9/9/2004.

Includes bibliographical references.

Publisher Number:

10.1596/1813-9450-3377