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Preliminary Comments welcome The Determinants of Banking Crises: Evidence from Developed and Developing Countries†

By Asli Demirgüç-kunt and Enrica Detragiache


The paper studies the factors associated with the emergence of systemic banking crises in a sample of developed and developing countries in 1981-94 using a multivariate logit econometric model. The results show that a weak macroeconomic environment with low growth and high inflation makes crises more likely; high real interest rates have also contributed to banking sector fragility, and so does vulnerability to balance-of-payments crises. Countries with an explicit deposit insurance scheme were also particularly at risk, and so were countries with weak law enforcement

Topics: banking sector, banking crises, deposit insurance. JEL Classification, E44, G21
Year: 1997
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