Early warning indicators for systemic banking crises: household debt and property prices
The 2008 financial crisis was the result of escalating house prices and a hasty increase in household debt. In a sample of 41 advanced and emerging countries, this paper employs a logit estimation model to examine the role of household debt and house price as indicators of systemic banking for the...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2020
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| Online Access: | http://journalarticle.ukm.my/15594/ http://journalarticle.ukm.my/15594/1/jeko_54%281%29-9.pdf |
| _version_ | 1848813835700404224 |
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| author | Khairunnisa Abd Samad, Siti Nurazira Mohd Daud, Nuradli Ridzwan Shah Mohd Dali, |
| author_facet | Khairunnisa Abd Samad, Siti Nurazira Mohd Daud, Nuradli Ridzwan Shah Mohd Dali, |
| author_sort | Khairunnisa Abd Samad, |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | The 2008 financial crisis was the result of escalating house prices and a hasty increase in household debt. In a sample
of 41 advanced and emerging countries, this paper employs a logit estimation model to examine the role of household
debt and house price as indicators of systemic banking for the period of 1980 until 2018. The results confirm that a
high growth in household debt and house price increase enhances the probability for crises to erupt. While this is a
consistent evidence for advanced economies, an observation of emerging economies suggests that only a change in
household debt and not a change in house prices may cause banking crises to erupt. Policymakers can thus design
predictive EWS models based on the surge in household debt and house prices prior to the crises which would lessen,
if not alleviate, the effect of upcoming economic shocks by monitoring the macroeconomic changes. |
| first_indexed | 2025-11-15T00:24:30Z |
| format | Article |
| id | oai:generic.eprints.org:15594 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T00:24:30Z |
| publishDate | 2020 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:155942020-11-09T03:05:01Z http://journalarticle.ukm.my/15594/ Early warning indicators for systemic banking crises: household debt and property prices Khairunnisa Abd Samad, Siti Nurazira Mohd Daud, Nuradli Ridzwan Shah Mohd Dali, The 2008 financial crisis was the result of escalating house prices and a hasty increase in household debt. In a sample of 41 advanced and emerging countries, this paper employs a logit estimation model to examine the role of household debt and house price as indicators of systemic banking for the period of 1980 until 2018. The results confirm that a high growth in household debt and house price increase enhances the probability for crises to erupt. While this is a consistent evidence for advanced economies, an observation of emerging economies suggests that only a change in household debt and not a change in house prices may cause banking crises to erupt. Policymakers can thus design predictive EWS models based on the surge in household debt and house prices prior to the crises which would lessen, if not alleviate, the effect of upcoming economic shocks by monitoring the macroeconomic changes. Penerbit Universiti Kebangsaan Malaysia 2020 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/15594/1/jeko_54%281%29-9.pdf Khairunnisa Abd Samad, and Siti Nurazira Mohd Daud, and Nuradli Ridzwan Shah Mohd Dali, (2020) Early warning indicators for systemic banking crises: household debt and property prices. Jurnal Ekonomi Malaysia, 54 (1). pp. 121-134. ISSN 0127-1962 https://www.ukm.my/fep/jem/content/2020.html |
| spellingShingle | Khairunnisa Abd Samad, Siti Nurazira Mohd Daud, Nuradli Ridzwan Shah Mohd Dali, Early warning indicators for systemic banking crises: household debt and property prices |
| title | Early warning indicators for systemic banking crises: household debt and property prices |
| title_full | Early warning indicators for systemic banking crises: household debt and property prices |
| title_fullStr | Early warning indicators for systemic banking crises: household debt and property prices |
| title_full_unstemmed | Early warning indicators for systemic banking crises: household debt and property prices |
| title_short | Early warning indicators for systemic banking crises: household debt and property prices |
| title_sort | early warning indicators for systemic banking crises: household debt and property prices |
| url | http://journalarticle.ukm.my/15594/ http://journalarticle.ukm.my/15594/ http://journalarticle.ukm.my/15594/1/jeko_54%281%29-9.pdf |