Resolution of Banking Crises: The Good, the Bad, and the Ugly

June 1, 2010

Preview Citation

Format: Chicago

Luc Laeven, and Fabian Valencia. Resolution of Banking Crises: The Good, the Bad, and the Ugly, (USA: International Monetary Fund, 2010) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper presents a new database of systemic banking crises for the period 1970-2009. While there are many commonalities between recent and past crises, both in terms of underlying causes and policy responses, there are some important differences in terms of the scale and scope of interventions. Direct fiscal costs to support the financial sector were smaller this time as a consequence of swift policy action and significant indirect support from expansionary monetary and fiscal policy, the widespread use of guarantees on liabilities, and direct purchases of assets. While these policies have reduced the real impact of the current crisis, they have increased the burden of public debt and the size of government contingent liabilities, raising concerns about fiscal sustainability in some countries.

Subject: Banking, Banking crises, Financial crises, Liquidity, Systemic crises

Keywords: Asset, Bank, Banking crisis, Crisis, Financial institution, WP

Publication Details

Pages:

35
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 2010/146
Stock No:

WPIEA2010146
ISBN:

9781455201297
ISSN:

1018-5941

Supplemental Resources

Link to data for this title
zip

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers