Banking Crises and Exchange Rate Regimes : Is There a Link?

The authors investigate the links between banking crises, and exchange rate regimes, using a comprehensive data set that includes developed, and developing countries over the last two decades. In particular, they examine whether the choice of excha...

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Main Authors:	Domac, Ilker, Martinez Peria, Maria Soledad
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ADVERSE EFFECTS AGGREGATE DEMAND BALANCE SHEET BANK ASSETS BANKING CRISES BANKING CRISIS BASKET OF CURRENCIES BLANKET GUARANTEES CAPITAL ACCOUNT CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK COMPETITIVENESS CONTRACT ENFORCEMENT CRAWLING PEGS CURRENCY CRISES CURRENCY MISMATCH CURRENCY OF DENOMINATION CURRENCY REGIME DEBT DEPOSIT FREEZES DEPOSIT INSURANCE DEPOSITS DEVELOPING COUNTRIES DOLLAR DEPOSITS DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC DEPOSITORS DOMESTIC RESIDENTS EMPIRICAL EVIDENCE EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE CHANGES EXCHANGE RATE FLEXIBILITY EXCHANGE RATE PEGS EXCHANGE RATE POLICIES EXCHANGE RATE POLICY EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXCHANGE RATE RISK EXCHANGE RATE STABILITY EXCHANGE RATES EXPECTED RETURNS EXTERNAL SHOCK EXTERNAL SHOCKS FINANCIAL CRISES FINANCIAL INSTABILITY FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTORS FINANCIAL STABILITY FINANCIAL SYSTEMS FISCAL COST FISCAL POLICY FIXED EXCHANGE RATE FIXED EXCHANGE RATES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE SYSTEMS FLEXIBLE EXCHANGE RATES FLOATING EXCHANGE RATE FLOATING EXCHANGE RATES FOREIGN ASSETS FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN INTEREST RATES GDP GDP PER CAPITA GOVERNMENT GUARANTEES GROWTH RATE HIGH INFLATION INDEXATION INFLATION RATE INTERMEDIATE REGIMES INTERNATIONAL MARKETS LIQUIDITY LIQUIDITY SUPPORT LOANABLE FUNDS LOCAL CURRENCY M2 MACROECONOMIC CONDITIONS MACROECONOMIC FACTORS MACROECONOMIC MANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MONETARY AGGREGATES MONETARY POLICY MORAL HAZARD NATIONALIZATION OF BANKS NOMINAL DEVALUATION NOMINAL EXCHANGE RATE NOMINAL INTEREST RATES OUTPUT COST OUTPUT GROWTH OUTPUT VOLATILITY PEGS POLICY RESEARCH POVERTY REDUCTION PRIVATE DOMESTIC PRIVATE DOMESTIC CREDIT PRIVATE SECTOR REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATE VOLATILITY REAL GDP REAL GROWTH REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REAL OUTPUT RESERVES SHORT-TERM INTEREST RATES TERMS OF TRADE
Online Access:	http://hdl.handle.net/10986/19778

id	okr-10986-19778
recordtype	oai_dc
spelling	okr-10986-197782017-12-14T04:07:35Z Banking Crises and Exchange Rate Regimes : Is There a Link? Domac, Ilker Martinez Peria, Maria Soledad ADVERSE EFFECTS AGGREGATE DEMAND BALANCE SHEET BANK ASSETS BANKING CRISES BANKING CRISIS BASKET OF CURRENCIES BLANKET GUARANTEES CAPITAL ACCOUNT CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK COMPETITIVENESS CONTRACT ENFORCEMENT CRAWLING PEGS CURRENCY CRISES CURRENCY MISMATCH CURRENCY OF DENOMINATION CURRENCY REGIME DEBT DEPOSIT FREEZES DEPOSIT INSURANCE DEPOSITS DEVELOPING COUNTRIES DOLLAR DEPOSITS DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC DEPOSITORS DOMESTIC RESIDENTS EMPIRICAL EVIDENCE EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE CHANGES EXCHANGE RATE FLEXIBILITY EXCHANGE RATE PEGS EXCHANGE RATE POLICIES EXCHANGE RATE POLICY EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXCHANGE RATE RISK EXCHANGE RATE STABILITY EXCHANGE RATES EXPECTED RETURNS EXTERNAL SHOCK EXTERNAL SHOCKS FINANCIAL CRISES FINANCIAL INSTABILITY FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTORS FINANCIAL STABILITY FINANCIAL SYSTEMS FISCAL COST FISCAL POLICY FIXED EXCHANGE RATE FIXED EXCHANGE RATES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE SYSTEMS FLEXIBLE EXCHANGE RATES FLOATING EXCHANGE RATE FLOATING EXCHANGE RATES FOREIGN ASSETS FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN INTEREST RATES GDP GDP PER CAPITA GOVERNMENT GUARANTEES GROWTH RATE HIGH INFLATION INDEXATION INFLATION RATE INTERMEDIATE REGIMES INTERNATIONAL MARKETS LIQUIDITY LIQUIDITY SUPPORT LOANABLE FUNDS LOCAL CURRENCY M2 MACROECONOMIC CONDITIONS MACROECONOMIC FACTORS MACROECONOMIC MANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MONETARY AGGREGATES MONETARY POLICY MORAL HAZARD NATIONALIZATION OF BANKS NOMINAL DEVALUATION NOMINAL EXCHANGE RATE NOMINAL INTEREST RATES OUTPUT COST OUTPUT GROWTH OUTPUT VOLATILITY PEGS POLICY RESEARCH POVERTY REDUCTION PRIVATE DOMESTIC PRIVATE DOMESTIC CREDIT PRIVATE SECTOR REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATE VOLATILITY REAL GDP REAL GROWTH REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REAL OUTPUT RESERVES SHORT-TERM INTEREST RATES TERMS OF TRADE The authors investigate the links between banking crises, and exchange rate regimes, using a comprehensive data set that includes developed, and developing countries over the last two decades. In particular, they examine whether the choice of exchange rate regime affects the likelihood, cost, and duration of banking crises. Empirical results indicate that adopting a fixed exchange rate, diminishes the likelihood of a banking crisis in developing countries. But once a banking crisis occurs, its real costs - in terms of forgone output growth - are higher for countries with more stringent exchange rate requirements. The duration of crises seems not to be affected by exchange rate policy. Instead, it is influenced mainly by the size of the credit boom before the crisis. 2014-08-27T20:19:22Z 2014-08-27T20:19:22Z 2000-11 http://hdl.handle.net/10986/19778 English en_US Policy Research Working Paper;No. 2489 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	World Bank
building	World Bank Open Knowledge Repository
collection	Online Access
language	English en_US
topic	ADVERSE EFFECTS AGGREGATE DEMAND BALANCE SHEET BANK ASSETS BANKING CRISES BANKING CRISIS BASKET OF CURRENCIES BLANKET GUARANTEES CAPITAL ACCOUNT CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK COMPETITIVENESS CONTRACT ENFORCEMENT CRAWLING PEGS CURRENCY CRISES CURRENCY MISMATCH CURRENCY OF DENOMINATION CURRENCY REGIME DEBT DEPOSIT FREEZES DEPOSIT INSURANCE DEPOSITS DEVELOPING COUNTRIES DOLLAR DEPOSITS DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC DEPOSITORS DOMESTIC RESIDENTS EMPIRICAL EVIDENCE EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE CHANGES EXCHANGE RATE FLEXIBILITY EXCHANGE RATE PEGS EXCHANGE RATE POLICIES EXCHANGE RATE POLICY EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXCHANGE RATE RISK EXCHANGE RATE STABILITY EXCHANGE RATES EXPECTED RETURNS EXTERNAL SHOCK EXTERNAL SHOCKS FINANCIAL CRISES FINANCIAL INSTABILITY FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTORS FINANCIAL STABILITY FINANCIAL SYSTEMS FISCAL COST FISCAL POLICY FIXED EXCHANGE RATE FIXED EXCHANGE RATES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE SYSTEMS FLEXIBLE EXCHANGE RATES FLOATING EXCHANGE RATE FLOATING EXCHANGE RATES FOREIGN ASSETS FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN INTEREST RATES GDP GDP PER CAPITA GOVERNMENT GUARANTEES GROWTH RATE HIGH INFLATION INDEXATION INFLATION RATE INTERMEDIATE REGIMES INTERNATIONAL MARKETS LIQUIDITY LIQUIDITY SUPPORT LOANABLE FUNDS LOCAL CURRENCY M2 MACROECONOMIC CONDITIONS MACROECONOMIC FACTORS MACROECONOMIC MANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MONETARY AGGREGATES MONETARY POLICY MORAL HAZARD NATIONALIZATION OF BANKS NOMINAL DEVALUATION NOMINAL EXCHANGE RATE NOMINAL INTEREST RATES OUTPUT COST OUTPUT GROWTH OUTPUT VOLATILITY PEGS POLICY RESEARCH POVERTY REDUCTION PRIVATE DOMESTIC PRIVATE DOMESTIC CREDIT PRIVATE SECTOR REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATE VOLATILITY REAL GDP REAL GROWTH REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REAL OUTPUT RESERVES SHORT-TERM INTEREST RATES TERMS OF TRADE
spellingShingle	ADVERSE EFFECTS AGGREGATE DEMAND BALANCE SHEET BANK ASSETS BANKING CRISES BANKING CRISIS BASKET OF CURRENCIES BLANKET GUARANTEES CAPITAL ACCOUNT CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK COMPETITIVENESS CONTRACT ENFORCEMENT CRAWLING PEGS CURRENCY CRISES CURRENCY MISMATCH CURRENCY OF DENOMINATION CURRENCY REGIME DEBT DEPOSIT FREEZES DEPOSIT INSURANCE DEPOSITS DEVELOPING COUNTRIES DOLLAR DEPOSITS DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC DEPOSITORS DOMESTIC RESIDENTS EMPIRICAL EVIDENCE EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE CHANGES EXCHANGE RATE FLEXIBILITY EXCHANGE RATE PEGS EXCHANGE RATE POLICIES EXCHANGE RATE POLICY EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXCHANGE RATE RISK EXCHANGE RATE STABILITY EXCHANGE RATES EXPECTED RETURNS EXTERNAL SHOCK EXTERNAL SHOCKS FINANCIAL CRISES FINANCIAL INSTABILITY FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTORS FINANCIAL STABILITY FINANCIAL SYSTEMS FISCAL COST FISCAL POLICY FIXED EXCHANGE RATE FIXED EXCHANGE RATES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE SYSTEMS FLEXIBLE EXCHANGE RATES FLOATING EXCHANGE RATE FLOATING EXCHANGE RATES FOREIGN ASSETS FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN INTEREST RATES GDP GDP PER CAPITA GOVERNMENT GUARANTEES GROWTH RATE HIGH INFLATION INDEXATION INFLATION RATE INTERMEDIATE REGIMES INTERNATIONAL MARKETS LIQUIDITY LIQUIDITY SUPPORT LOANABLE FUNDS LOCAL CURRENCY M2 MACROECONOMIC CONDITIONS MACROECONOMIC FACTORS MACROECONOMIC MANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MONETARY AGGREGATES MONETARY POLICY MORAL HAZARD NATIONALIZATION OF BANKS NOMINAL DEVALUATION NOMINAL EXCHANGE RATE NOMINAL INTEREST RATES OUTPUT COST OUTPUT GROWTH OUTPUT VOLATILITY PEGS POLICY RESEARCH POVERTY REDUCTION PRIVATE DOMESTIC PRIVATE DOMESTIC CREDIT PRIVATE SECTOR REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATE VOLATILITY REAL GDP REAL GROWTH REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REAL OUTPUT RESERVES SHORT-TERM INTEREST RATES TERMS OF TRADE Domac, Ilker Martinez Peria, Maria Soledad Banking Crises and Exchange Rate Regimes : Is There a Link?
relation	Policy Research Working Paper;No. 2489
description	The authors investigate the links between banking crises, and exchange rate regimes, using a comprehensive data set that includes developed, and developing countries over the last two decades. In particular, they examine whether the choice of exchange rate regime affects the likelihood, cost, and duration of banking crises. Empirical results indicate that adopting a fixed exchange rate, diminishes the likelihood of a banking crisis in developing countries. But once a banking crisis occurs, its real costs - in terms of forgone output growth - are higher for countries with more stringent exchange rate requirements. The duration of crises seems not to be affected by exchange rate policy. Instead, it is influenced mainly by the size of the credit boom before the crisis.
format	Publications & Research :: Policy Research Working Paper
author	Domac, Ilker Martinez Peria, Maria Soledad
author_facet	Domac, Ilker Martinez Peria, Maria Soledad
author_sort	Domac, Ilker
title	Banking Crises and Exchange Rate Regimes : Is There a Link?
title_short	Banking Crises and Exchange Rate Regimes : Is There a Link?
title_full	Banking Crises and Exchange Rate Regimes : Is There a Link?
title_fullStr	Banking Crises and Exchange Rate Regimes : Is There a Link?
title_full_unstemmed	Banking Crises and Exchange Rate Regimes : Is There a Link?
title_sort	banking crises and exchange rate regimes : is there a link?
publisher	World Bank, Washington, DC
publishDate	2014
url	http://hdl.handle.net/10986/19778
_version_	1610778395026653184

Banking Crises and Exchange Rate Regimes : Is There a Link?

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