## _wp08224 - introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank ## Source details **Canonical URL:** [_wp08224 - introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08224.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08224.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08224.pdf.json) --- ### Identification and dating of crises - Banking crisis identification criteria: - Introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank interventions. - Alternatively, it must become apparent that the banking system has a large proportion of nonperforming loans and that most of its capital has been exhausted (applies to remainder of crisis dates). - Bank runs: - Defined as a monthly percentage decline in deposits in excess of 5%. - Deposits computed as demand deposits (IFS line 24) plus time, savings and foreign currency deposits (IFS line 25) for total deposits in national currencies (except for UK, Sweden and Vietnam, IFS 25L used for total deposits). - Extensive liquidity support: - Defined as claims from monetary authorities on deposit money banks (IFS line 12E) to total deposits of at least 5% and at least double the ratio compared to the previous year. - Currency crisis (building on Frankel and Rose (1996)): - A nominal depreciation of the currency of at least 30 percent that is also at least a 10 percent increase in the rate of depreciation compared to the year before. - Measurement uses percent change of the end-of-period official nominal bilateral dollar exchange rate from the WEO database. - For continuous multi-year episodes, the first year of each 5-year window is used to identify the crisis. - Sovereign debt crisis identification: - Based on episodes of sovereign debt default and restructuring using Beim and Calomiris (2001), World Bank (2002), Sturzenegger and Zettelmeyer (2006), and IMF Staff reports. - Information compiled includes year of sovereign defaults to private lending and year of debt rescheduling. ### Summary counts and timing (1970 to 2007) - Total crises identified: - 124 systemic banking crises. - 208 currency crises. - 63 sovereign debt crises. - Banking crises timing: - Most frequent during the early 1990’s, with a maximum of 13 systemic banking crises starting in the year 1995. - Currency crises timing: - Common during the first-half of the 1990’s and early 1980’s, with a peak in 1994 of 25 episodes. - Sovereign debt crises timing: - Relatively common during the early 1980’s, with a peak of 9 debt crises in 1983. - Crisis coincidences: - Of the 124 banking crises, 26 are considered twin crises and 8 can be classified as triple crises. - Twin crisis: a banking crisis in year t combined with a currency crisis during the period [t-1, t+1]. - Triple crisis: a banking crisis in year t combined with a currency crisis during [t-1, t+1] and a sovereign debt crisis during [t-1, t+1]. ### Measurement of costs, output, and growth - Peak nonperforming loans: - Defined as the highest level of nonperforming loans as percentage of total loans during the first five years of the crisis. - Gross fiscal costs: - Computed over the first five years following the start of the crisis using data from Hoelscher and Quintyn (2003), Honohan and Laeven (2003), IMF Staff reports, and national authorities. - Output losses: - Computed by extrapolating trend real GDP based on the trend in real GDP growth up to the year preceding the crisis. - Output losses equal the sum of the differences between actual real GDP and trend real GDP expressed as a percentage of trend real GDP for the first four years of the crisis (including the crisis year). - Note: measure tends to overstate losses when there was a growth boom before the banking crisis and losses need not be attributed solely to the banking crisis. - Minimum real GDP growth rate: - Defined as the lowest real GDP growth rate during the first three years of the crisis. ### Crisis containment and resolution framework - Phases: - Containment phase: crisis still unfolding; policies aim to restore public confidence and minimize real-sector repercussions. - Resolution phase: financial and, to lesser extent, operational restructuring of financial institutions and corporations. - Immediate containment policies often remain part of long-run resolution; poorly chosen containment policies can undermine long-term resolution. - Data collected for policy analysis: - Detailed data on containment and resolution policies for a subset of 42 systemic banking crisis episodes in 37 countries. - Variables organized by: initial conditions, containment policies, resolution policies, macroeconomic policies, and outcome variables. - Initial conditions dataset includes: - Whether banking distress coincided with exchange rate pressures and sovereign debt repayment problems. - CRISIS DATE recorded as starting date of the banking crisis, including year and month when available. ### Data, definitions, and key variables (section II) - CURRENCY CRISIS: indicator if a currency crisis occurred during [t-1, t+1]; YEAR OF CURRENCY CRISIS recorded. - Example timing rule: a nominal depreciation of at least 30 percent that is also at least a 10 percent increase in the rate of depreciation in both years t-2 and t-1 is treated as a crisis in year t-1. - SOVEREIGN DEBT CRISIS: indicator if a sovereign debt crisis occurred during [t-1, t+1]; YEAR OF SOVEREIGN DEBT CRISIS recorded. - BRIEF DESCRIPTION OF CRISIS: short narrative on each crisis episode. Initial macroeconomic condition variables (computed at time t-1): - FISCAL BALANCE/GDP: General Government balance to GDP (pre-crisis year t-1). - PUBLIC DEBT/GDP: General Government gross debt to GDP (pre-crisis year t-1). - INFLATION: percentage increase in CPI during pre-crisis year t-1. - NET FOREIGN ASSETS (CENTRAL BANK): net foreign assets of the Central Bank in millions of US dollars (pre-crisis year t-1). - NET FOREIGN ASSETS/M2: net foreign assets (Central Bank) to M2 (pre-crisis year t-1). - DEPOSITS/GDP: total deposits at deposit-taking institutions to GDP (pre-crisis year t-1). - GDP GROWTH: real growth in GDP during pre-crisis year t-1. - CURRENT ACCOUNT/GDP: current account to GDP (pre-crisis year t-1). - Note: "Whenever General Government data was not available, Central Government data was used." Banking system state variables: - PEAK NPL: peak ratio of nonperforming loans to total loans (in percent) during [t, t+5]; uses country definition of NPLs. - GOVERNMENT OWNED: share of banking system assets government-owned (in percent) in year t-1; data from La Porta et al. (2002) referring to year 1980 or 1995, unless IMF staff reports provide more recent data. - SIGNIFICANT BANK RUNS: one-month percentage drop in total outstanding deposits in excess of 5 percent during [t, t+1]. - CREDIT BOOM: three-year pre-crisis average growth in private credit to GDP in excess of 10 percent per annum computed over (t-4, t-1]. - CREDITOR RIGHTS: index (0 to 4) from Djankov et al. (2007), using score in year t. Containment policy variables: - DEPOSIT FREEZE: whether deposits frozen; if so, duration (months) and types of deposits affected. - BANK HOLIDAY: whether bank holiday installed; if so, duration (days). - BLANKET GUARANTEE: whether blanket guarantee introduced; if so, date of introduction/removal, duration (months), whether prior explicit deposit insurance existed, administering agency, coverage. - TIMING OF FIRST BANK INTERVENTION: date (month and year). - TIMING OF FIRST LIQUIDITY ASSISTANCE: date (month and year). - LIQUIDITY SUPPORT: whether claims from monetary authorities on deposit money banks (IFS line 12E) to total deposits is at least 5 percent and at least doubled vs previous year during [t, t+3]; peak liquidity support computed as maximum ratio (in percent) of IFS line 12E to total deposits during [t, t+3]. - LOWERING OF RESERVE REQUIREMENTS: whether authorities lowered reserve requirements. - Additional liquidity features: whether support differed across banks; whether emergency lending was remunerated and at market rates. Resolution policy variables: - FORBEARANCE: regulatory forbearance during [t, t+3]; includes whether technically insolvent banks continued functioning and whether prudential rules were suspended during first three years. - LARGE-SCALE GOVERNMENT INTERVENTION: nationalizations, closures, mergers, sales, recapitalizations during [t, t+3]. - INSTITUTIONS CLOSED: share of bank assets (in percent) liquidated/closed during [t, t+3]; number of banks in year t and t+3. - BANK CLOSURES: whether banks closed during t to t+3; number of banks closed/liquidated in t to t+3. - OTHER FI CLOSURES: closures of financial institutions other than banks. - SHAREHOLDER PROTECTION: whether shareholders of closed institutions were made whole. - NATIONALIZATIONS, MERGERS, SALES TO FOREIGNERS: occurrence during t to t+5; for mergers, whether private shareholders injected capital; for sales to foreigners, number sold. - BANK RESTRUCTURING AGENCY and ASSET MANAGEMENT COMPANY: whether set up; for AMCs, whether centralized/decentralized, entity in charge, funding, type of assets transferred. - RECAPITALIZATION: whether banks recapitalized by government during t to t+3; methods collected include: (1) cash, (2) government bonds, (3) subordinated debt, (4) preferred shares, (5) purchase of bad loans, (6) credit lines, (7) assumption of bank liabilities, (8) ordinary shares, (9) other means. - RECAP COST (GROSS): targeted recapitalization level (percent of assets) and gross recapitalization cost (percent of GDP) during t to t+5 when available. - RECOVERY: whether government recovered part of recap cost. - RECOVERY PROCEEDS: recovery proceeds (percent of GDP) during t to t+5. - RECAP COST (NET): net recapitalization cost = gross recap cost minus recovery proceeds. Deposit insurance and depositor compensation variables: - DEPOSIT INSURANCE: whether explicit deposit insurance in place at start of crisis (ignores schemes introduced after first year). - FORMATION: year deposit insurance introduced. - COVERAGE LIMIT: coverage limit (local currency) at start of crisis; set to zero if none. - COVERAGE RATIO: coverage limit to per capita GDP at start of crisis; set to zero if none. - WERE LOSSES IMPOSED ON DEPOSITORS?: whether depositors of failed banks faced losses; if so, whether losses were severe. Macroeconomic policy variables during [t, t+3]: - MONETARY POLICY INDEX: +1 expansive if average % change in reserve money during [t, t+3] is between 1 to 5 percent higher than during [t-4, t-1]; -1 contractive if between 1 to 5 percent lower; 0 neither. Also report average change in reserve money (in percent) during [t, t+3]. - FISCAL POLICY INDEX: +1 expansive if average fiscal balance during [t, t+3] is less than -1.5 percent of GDP; -1 contractive if greater than 1.5 percent of GDP; 0 neither. Also report average fiscal balance (in percent of GDP) during [t, t+3]. - IMF PROGRAM: whether an IMF program was put in place around the time of the banking crisis, and the year. Outcome variables: - FISCAL COST (NET): net fiscal cost (percent of GDP) over [t, t+5]; gross fiscal costs and recovery proceeds also reported. Sources: Hoelscher and Quintyn (2003), Honohan and Laeven (2003), IMF Staff reports, national authorities. - OUTPUT LOSS: sum of deviations of actual real GDP from trend real GDP (trend based on pre-crisis growth up to year before crisis) expressed as percent of trend real GDP for [t, t+3]. Minimum of three pre-crisis real GDP growth observations required. ### Descriptive findings and key statistics (subset of 42 systemic crises) - Crisis coincidence: - Banking crisis coincides with a currency crisis in 55 percent of cases. - Banking crisis coincides with a sovereign debt crisis in 11 percent of cases. - Macroeconomic pre-crisis averages: - Average fiscal balance: -2.1 percent. - Average current account: -3.9 percent. - Average inflation: 137 percent. - Banking sector metrics: - Peak nonperforming loans: average about 25 percent; can be as high as 75 percent. - Government ownership of banking assets: about 31 percent on average. - Bank runs: 62 percent of crises experienced sharp reductions in total deposits. - Largest one-month drop in ratio of deposits to GDP averages about 11.2 percent for countries experiencing bank runs, and is as high as 26.7 percent in one case. - Credit booms: about 30 percent of crises preceded by credit booms. - Average annual growth in private credit to GDP prior to crisis: about 8.3 percent; as high as 34.1 percent (Chile). - Creditor rights: average about 1.8 (range 0 to 4). - Crisis containment usage (42 episodes subset): - Emergency liquidity support used in 71 percent of crises. - Blanket guarantees used in 29 percent of crises. - Deposit freezes used in 12 percent (5 cases): Argentina 1989 and 2001, Brazil 1990, Ecuador 1999, Uruguay 2002. - Bank holidays used in 10 percent; where used, average duration about 5 days. - Deposit freezes duration: up to 10 years in one case; about 41 months on average. - Blanket guarantees average duration: about 53 months. - Peak liquidity support average: about 28 percent of total deposits. - Correlation: about 30 percent positive correlation between extensive liquidity support and blanket guarantees. - Crisis resolution usage and outcomes: - Regulatory forbearance occurs in about 67 percent of crisis episodes. - Forbearance: 35 percent of cases involve banks allowed to continue despite being technically insolvent. - 73 percent of cases had prudential regulations suspended or not fully applied. - Large-scale government intervention occurs in 86 percent of cases. - Sales to foreigners occurred in about 51 percent of episodes. - Special bank restructuring agencies set up in 48 percent of crises. - Asset management companies (AMCs) set up in 60 percent of crises; AMCs tend to be centralized. - AMCs positively correlated with peak NPLs and fiscal costs by about 15 percent. - Recapitalization: - Occurred in 33 out of 42 episodes. - Methods observed (counts): cash (12), government bonds (14), subordinated debt (11), preferred shares (6), purchase of bad loans (7), credit lines (2), assumption of bank liabilities (3), ordinary shares (4). - Net recapitalization cost average: 6.0 percent of GDP (sample), with Indonesia up to 37.3 percent of GDP. - Deposit insurance: about half of systemic crisis countries had explicit deposit insurance at outbreak. - Losses imposed on depositors: minority of cases; episodes with depositor losses correlated with higher output losses (correlation about 8 percent). - Macroeconomic policy stance during crises: - Monetary policy tends to be fairly neutral in crises. - Fiscal stance tends to be expansive; average fiscal balance about -3.6 percent of GDP during initial years of a banking crisis. - IMF programs involved in about 52 percent of episodes. - Fiscal and real costs: - Fiscal costs (net of recoveries) average about 13.3 percent of GDP; can be as high as 55.1 percent of GDP. - Average recovery rate: 18.2 percent of gross fiscal costs. - Output losses (deviations from trend during first four years) average about 20 percent of GDP; range from 0 percent to 98 percent of GDP. ### Policy analysis and recommendations - Immediate containment tools (do not require new institutions): - Suspension of convertibility of deposits (deposit freezes/bank holidays). - Regulatory capital forbearance. - Emergency liquidity support. - Government guarantee of depositors. - Choose containment tools based on crisis trigger: - Loss of depositor confidence: emergency liquidity loans, extension of government guarantees, or temporary suspension of depositor rights (bank holiday) to buy time. - Insolvency recognition: administrative intervention, temporary assumption of management, closure with subsidized compulsory sale of good assets to sound banks, assisted merger. - Wider macro/asset-market shocks: regulatory forbearance may be appropriate. - Key considerations during containment: - Credibility and creditworthiness of the government determine success of guarantees and liquidity measures. - Prior legal powers are critical for closure or administrative interventions. - Avoid privileging short-run stability at cost of long-run fiscal burden; excessive liquidity extension to insolvent banks can worsen outcomes. - Crisis resolution approaches and trade-offs: - Core approaches: conditional decentralized workouts, debt forgiveness, government-owned AMCs, government-assisted sales to new (often foreign) owners, government-assisted recapitalization. - Choice depends on source of crisis: - If information/relationship capital with existing owners/managers is valuable, preserving them may be optimal. - If insolvency stems from incompetence, corruption, or political misuse of banks, carve-outs and new ownership/management are preferable. - Inflation/currency devaluation as generalized debt relief may reduce fiscal burden but transfer costs to nominal creditors; requires macro policy trade-offs. - Design principles for recapitalization and restructuring: - Speed is essential: recognize losses, establish problem scale, ensure adequate capitalization quickly. - Successful recapitalization is selective, specifies clear quantifiable access rules, and enforces meaningful risk-based capital regulation. - Beware of moral hazard: avoid poorly designed generalized assistance; incorporate safeguards and conditionality. - AMCs often ineffective where political and legal constraints limit disposal of assets. - Targeted debt relief and corporate restructuring programs can be effective to relieve indebted corporates and households; these require public funds and good targeting with safeguards. - Research priorities: - Measure extent to which fiscal costs from accommodative measures (liquidity support, guarantees, forbearance) reduce output losses and speed recovery. - Identify resolution policies that mitigate moral hazard going forward. - Review and draw lessons from policy responses to the ongoing US and UK turmoil. ### Global liquidity crisis of 2007-2008 — initial observations and comparison - Context and drivers: - Macro factors: prolonged excess global liquidity, relatively low interest rates post-2001, housing prices more than doubled in nominal terms between 2000 and mid-2006 (measured by Case-Shiller 20-city composite index percent change between January 2000 and peak July 2006). - Micro factors: "originate-and-distribute" model, securitization, mispricing of mortgage-backed securities, deterioration in underwriting standards, reliance by some banks on wholesale funding. - Early containment steps and chronology: - US: - Fed lowered the discount rate by 0.5 percent on August 16, 2007, and accepted $17.2 billion in repurchase agreements for mortgage-backed securities. - Term Securities Lending facility introduced March 2008 (lend up to $200 billion of Treasury securities for 28 days); expanded swap lines with other central banks. - UK: - Northern Rock received Bank of England liquidity support on September 14, 2007; government blanket guarantee on September 17, 2007 (covering Northern Rock). - Bank of England announced Special Liquidity Scheme on April 21, 2008 (accept broad range of MBS and swap for government paper for 1 year). - Major events: - Bear Stearns assistance and sale in March 2008 (federal guarantees on liabilities). - Collapse of Lehman Brothers on September 14, 2008 (Chapter 11). - Merrill Lynch acquisition by Bank of America on September 15, 2008. - Conservatorship of Fannie Mae and Freddie Mac on September 7, 2008: FHFA oversight; Treasury authority to inject capital in form of senior preferred shares and warrants; dividends suspended. - Differences and similarities with historical crises: - Similarities: reliance on extensive liquidity support, use of guarantees, expansion of liquidity tools, recapitalizations, mergers and acquisitions, asset sales. - Differences: support extended to investment banks and nonbank intermediaries; limited sudden-stop capital flow dynamics in US/UK context so far; role of sovereign wealth funds injecting capital in recapitalizations. - Quantitative indicators (selected): - US banks’ profits declined from $35.2 to $5.8 billion (83.5 percent) during Q4 2007 versus prior year due to provisions for loan losses. - As of August 2008, subprime-related and other credit losses or writedowns by global financial institutions approx. 500 billion dollars; another passage notes about $400 billion by June 2008. - Northern Rock recapitalization costs to UK government amounted to 0.20 percent of GDP (as of writing). - By end-August 2008 FDIC watch list: 117 troubled banks; largest commercial bank failure to date: IndiMac with US$ 19 billion in deposits (taken over July 2008). - Interim assessment: - Containment and resolution measures in US/UK broadly follow historical patterns; nationalization of Northern Rock is noteworthy. - Too early to evaluate ultimate effectiveness; further research and data needed. ### Case: Introduction of capital controls and deposit freezes in Argentina in Dec. 2001 - Summary of events and immediate impacts: - Capital controls and deposit freezes introduced in Argentina in Dec. 2001 triggered liquidity problems at the two largest private banks: Banco Galicia Uruguay (BGU) and Banco Comercial (BC). - BGU and BC had combined assets of 20% of the total banking system. - In January 2002, BGU lost 15% of deposits. - BGU was intervened in February 2002 and later suspended. - Second wave of deposit withdrawals occurred in April 2002 following Uruguay’s downgrade from investment grade status. - By May 2002, deposit runs expanded to the public banks (Republica and Hipotecario), which together accounted for 40% of the system’s assets and were in weak condition with NPL’s of 39% as of 2001 (compared to 6% at private banks). - Timeline: - Dec. 2001: Argentina introduces capital controls and deposit freezes. - Jan. 2002: BGU loses 15% of deposits. - Feb. 2002: BGU intervened and later suspended. - Apr. 2002: Second wave of withdrawals after Uruguay downgrade. - May 2002: Runs reach public banks Republica and Hipotecario (40% of system assets). - Bank-level exposures and asset quality: - Combined assets of BGU and BC: 20% of total system assets. - Public banks (Republica and Hipotecario): 40% of system assets. - NPLs as of 2001: - Public banks: 39% - Private banks: 6% - Table-based indicators for Argentina (selected metrics from Table 4): - Crisis date (year and month): Dec-01 - Currency crisis (Y/N) (t-1, t+1): Y - Year of currency crisis: 2002 - Sovereign debt crisis (Y/N) (t-1, t+1): Y - Year of sovereign debt crisis: 2001 - Initial conditions (at t-1): - Fiscal balance/GDP at t-1: -3.61% - Public sector Debt/GDP at t-1: 50.80% - Inflation at t-1: -0.73% - Net Foreign Assets/M2 at t-1: 24.16% - Deposits/GDP at t-1: 28.22% - GDP growth at t-1: -0.79% - Current Account/GDP at t-1: -3.15% - Peak NPLs (as % of total loans): 20.10% - Government-owned bank (% of assets) at t-1: 30.00% - Significant bank runs (Y/N): Y - Largest one-month % drop in deposits (>5%), [t, t+1]: 6.84% - Credit boom (Y/N): N - Annual growth in private credit to GDP (t-4, t-1] (in %): 6.10% - Creditor rights in year t: 1 - Containment phase — Deposit freeze (Y/N): Y - Key implications: - High cross-border exposure of private banks (BGU, BC) to Argentina translated Argentina’s policy measures into solvency/liquidity stress in Uruguay. - Deposit losses can be rapid and severe (example: BGU lost 15% of deposits in a single month). - Public banks with large shares of system assets and high NPLs present amplification risk for systemic stress (Republica and Hipotecario: 40% of assets and 39% NPLs as of 2001). - Sovereign distress in the originating country coincided with banking and currency crises in the region (Argentina: currency crisis in 2002; sovereign debt crisis in 2001). ### Empirical summary statistics and episode-level indicators (selected tables and aggregates) - Bank holiday: - Duration of bank holiday (in days) across observations: Mean = 4.750; Std. Dev. = 0.500; Minimum = 4; Maximum = 5. - Bank holiday used in about 10 percent of 42-episode subset; where used, average duration about 5 days. - Blanket guarantees: - Duration of guarantee (in months) summary: Number of crises = 14; Mean = 53.071; Std. Dev. = 33.992; Minimum = 11; Maximum = 109. - Liquidity support: - Peak liquidity support (fraction of deposits) summary: Number of crises = 41; Mean = 0.277; Std. Dev. = 0.497; Minimum = 0; Maximum = 3. - Forbearance and regulatory suspension: - Forbearance summary: Number of crises = 42; Mean = 0.667; Std. Dev. = 0.477; Minimum = 0; Maximum = 1. - Prudential regulations suspended or not fully applied: Number = 37; Mean = 0.730; Std. Dev. = 0.450; Minimum = 0; Maximum = 1. - Bank closures and consolidation: - Fraction of financial institutions closed: Number = 39; Mean = 0.083; Std. Dev. = 0.117; Minimum = 0; Maximum = 0.500. - Bank closures summary: Number of crises = 42; Mean = 0.667; Std. Dev. = 0.477; Minimum = 0; Maximum = 1. - Recapitalization: - Recap level (%) summary: Number = 13; Mean = 0.078; Std. Dev. = 0.020; Minimum = 0.040; Maximum = 0.100. - Recap cost to government (gross) (fraction of GDP) summary: Number = 32; Mean = 0.078; Std. Dev. = 0.096; Minimum = 0.002; Maximum = 0.373. - Recap cost to government (net) (fraction of GDP) summary: Number = 32; Mean = 0.060; Std. Dev. = 0.079; Minimum = 0; Maximum = 0.373. - Deposit insurance: - Deposit insurance (summary): Number = 42; Mean = 0.524; Std. Dev. = 0.505; Minimum = 0; Maximum = 1. - Coverage limit to per capita GDP (summary): Number = 35; Mean = 1.142; Std. Dev. = 1.730; Minimum = 0; Maximum = 7.180. - Fiscal and output outcomes (42-episode subset): - Fiscal cost net (summary): Number = 40; Mean = 0.130; Std. Dev. = 0.133; Minimum = 0; Maximum = 0.551. - Gross fiscal cost (summary): Number = 40; Mean = 0.157; Std. Dev. = 0.150; Minimum = 0; Maximum = 0.568. - Recovery of fiscal expense (summary): Number = 40; Mean = 0.027; Std. Dev. = 0.048; Minimum = 0; Maximum = 0.261. - Output loss (summary): Number = 40; Mean = 0.201; Std. Dev. = 0.260; Minimum = 0; Maximum = 0.977. - Descriptive statistics of initial conditions (selected): - Number of crises = 42; Start year of banking crisis: Mean = 1995; Std. Dev. = 6.100; Minimum = 1980; Maximum = 2007. - Currency crisis (Y/N): Mean = 0.548; Sovereign debt crisis (Y/N): Mean = 0.119. - Fiscal balance/GDP: Mean = -0.021; Debt/GDP (Number = 33): Mean = 0.464. - Inflation (Number = 41): Mean = 1.371. - Deposits/GDP: Mean = 0.491. - Peak NPLs (Number = 40): Mean = 0.252. - Government-owned banks (fraction of total assets): Mean = 0.309. - Bank runs (Y/N): Mean = 0.619. - Largest 1-month drop in deposits-to-GDP (Number = 26): Mean = 0.112. - Credit boom (Number = 33): Mean = 0.303. - Annual growth in private credit to GDP prior to crisis (Number = 33): Mean = 0.083. - Creditor rights (Number = 41): Mean = 1.780. *Source: _wp08224 - introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank* ### introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank ### _wp08224 - introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank ### Identification and dating of crises - Banking crisis identification criteria: - Introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank interventions. - Alternatively, it must become apparent that the banking system has a large proportion of nonperforming loans and that most of its capital has been exhausted. This additional requirement applies to the remainder of crisis dates. - Bank runs defined as a monthly percentage decline in deposits in excess of 5%. - Deposits computed as demand deposits (IFS line 24) plus time, savings and foreign currency deposits (IFS line 25) for total deposits in national currencies (except for UK, Sweden and Vietnam, IFS 25L used for total deposits). - Extensive liquidity support defined as claims from monetary authorities on deposit money banks (IFS line 12E) to total deposits of at least 5% and at least double the ratio compared to the previous year. - Currency crisis definition (building on Frankel and Rose (1996)): - A nominal depreciation of the currency of at least 30 percent that is also at least a 10 percent increase in the rate of depreciation compared to the year before. - Measurement uses percent change of the end-of-period official nominal bilateral dollar exchange rate from the WEO database. - For continuous multi-year episodes, the first year of each 5-year window is used to identify the crisis. - Sovereign debt crisis identification: - Based on episodes of sovereign debt default and restructuring using Beim and Calomiris (2001), World Bank (2002), Sturzenegger and Zettelmeyer (2006), and IMF Staff reports. - Information compiled includes year of sovereign defaults to private lending and year of debt rescheduling. ### Summary counts and timing - Total crises identified over 1970 to 2007: - 124 systemic banking crises. - 208 currency crises. - 63 sovereign debt crises. - Banking crises timing and peaks: - Banking crises were most frequent during the early 1990’s, with a maximum of 13 systemic banking crises starting in the year 1995. - Currency crises timing and peaks: - Currency crises were common during the first-half of the 1990’s and early 1980’s, with a peak in 1994 of 25 episodes. - Sovereign debt crises timing and peaks: - Sovereign debt crises were relatively common during the early 1980’s, with a peak of 9 debt crises in 1983. - Crisis coincidences: - Of the 124 banking crises, 26 are considered twin crises and 8 can be classified as triple crises. - Twin crisis defined: a banking crisis in year t combined with a currency crisis during the period [t-1, t+1]. - Triple crisis defined: a banking crisis in year t combined with a currency crisis during the period [t-1, t+1] and a sovereign debt crisis during the period [t-1, t+1]. ### Measurement of costs, output, and growth - Peak nonperforming loans: - Defined as the highest level of nonperforming loans as percentage of total loans during the first five years of the crisis. - Gross fiscal costs: - Computed over the first five years following the start of the crisis using data from Hoelscher and Quintyn (2003), Honohan and Laeven (2003), IMF Staff reports, and publications from national authorities and institutions. - Output losses: - Computed by extrapolating trend real GDP based on the trend in real GDP growth up to the year preceding the crisis. - Output losses equal the sum of the differences between actual real GDP and trend real GDP expressed as a percentage of trend real GDP for the first four years of the crisis (including the crisis year). - Note: estimates of output losses are highly dependent on the method and time period; measure tends to overstate losses when there was a growth boom before the banking crisis and losses need not be attributed solely to the banking crisis if the crisis reflects unsustainable developments. - Minimum real GDP growth rate: - Defined as the lowest real GDP growth rate during the first three years of the crisis. ### Crisis containment and resolution framework - Phases: - Containment phase: financial crisis is still unfolding; policies aim to restore public confidence and minimize real-sector repercussions from depositor and investor loss of confidence. - Resolution phase: involves financial and, to a lesser extent, operational restructuring of financial institutions and corporations. - Immediate containment policies often remain part of long-run resolution; poorly chosen containment policies can undermine successful long-term resolution. - Data collected for policy analysis: - Detailed data on crisis containment and resolution policies collected for a subset of 42 systemic banking crisis episodes in 37 countries. - Sources include IMF Staff reports, World Bank documents, and working papers from central bank staff and academics. - Variables organized by: initial conditions, containment policies, resolution policies, macroeconomic policies, and outcome variables. - Initial conditions dataset includes: - Whether banking distress coincided with exchange rate pressures and sovereign debt repayment problems. - Initial macroeconomic conditions. - State of the banking system. - Institutional development of the country. - CRISIS DATE recorded as starting date of the banking crisis, including year and month when available. *Source: _wp08224 - introduction of a deposit freeze or blanket guarantee, or extensive liquidity support or bank* ### section II. ### _wp08224 - section II. ### Data, definitions, and variables - CURRENCY CRISIS: indicator if a currency crisis occurred during [t-1, t+1], with timing rules as described; YEAR OF CURRENCY CRISIS recorded. Example rule: a nominal depreciation of at least 30 percent that is also at least a 10 percent increase in the rate of depreciation in both years t-2 and t-1 is treated as a crisis in year t-1. - SOVEREIGN DEBT CRISIS: indicator if a sovereign debt crisis occurred during [t-1, t+1]; YEAR OF SOVEREIGN DEBT CRISIS recorded. - BRIEF DESCRIPTION OF CRISIS: short narrative on each crisis episode. Initial macroeconomic condition variables (computed at time t-1): - FISCAL BALANCE/GDP: General Government balance to GDP (pre-crisis year t-1). - PUBLIC DEBT/GDP: General Government gross debt to GDP (pre-crisis year t-1). - INFLATION: percentage increase in CPI during pre-crisis year t-1. - NET FOREIGN ASSETS (CENTRAL BANK): net foreign assets of the Central Bank in millions of US dollars (pre-crisis year t-1). - NET FOREIGN ASSETS/M2: net foreign assets (Central Bank) to M2 (pre-crisis year t-1). - DEPOSITS/GDP: total deposits at deposit-taking institutions to GDP (pre-crisis year t-1). - GDP GROWTH: real growth in GDP during pre-crisis year t-1. - CURRENT ACCOUNT/GDP: current account to GDP (pre-crisis year t-1). - Note: "Whenever General Government data was not available, Central Government data was used." Banking system state variables: - PEAK NPL: peak ratio of nonperforming loans to total loans (in percent) during [t, t+5]; uses country definition of NPLs. - GOVERNMENT OWNED: share of banking system assets government-owned (in percent) in year t-1; data from La Porta et al. (2002) referring to year 1980 or 1995, unless IMF staff reports provide more recent data. - SIGNIFICANT BANK RUNS: one-month percentage drop in total outstanding deposits in excess of 5 percent during [t, t+1]. - CREDIT BOOM: three-year pre-crisis average growth in private credit to GDP in excess of 10 percent per annum computed over (t-4, t-1]. - CREDITOR RIGHTS: index (0 to 4) from Djankov et al. (2007), using score in year t. Crisis containment policy variables: - DEPOSIT FREEZE: whether deposits frozen; if so, duration (months) and types of deposits affected. - BANK HOLIDAY: whether bank holiday installed; if so, duration (days). - BLANKET GUARANTEE: whether blanket guarantee introduced; if so, date of introduction/removal, duration (months), whether prior explicit deposit insurance existed, administering agency, coverage. - TIMING OF FIRST BANK INTERVENTION: date (month and year). - TIMING OF FIRST LIQUIDITY ASSISTANCE: date (month and year). - LIQUIDITY SUPPORT: whether claims from monetary authorities on deposit money banks (IFS line 12E) to total deposits is at least 5 percent and at least doubled vs previous year during [t, t+3]; peak liquidity support computed as maximum ratio (in percent) of IFS line 12E to total deposits during [t, t+3]. - LOWERING OF RESERVE REQUIREMENTS: whether authorities lowered reserve requirements. - Additional liquidity features collected: whether support differed across banks; whether emergency lending was remunerated and at market rates. Crisis resolution policy variables: - FORBEARANCE: regulatory forbearance during [t, t+3]; qualitative assessment includes whether technically insolvent banks continued functioning and whether prudential rules were suspended during first three years. - LARGE-SCALE GOVERNMENT INTERVENTION: nationalizations, closures, mergers, sales, recapitalizations during [t, t+3]. - INSTITUTIONS CLOSED: share of bank assets (in percent) liquidated/closed during [t, t+3]; number of banks in year t and t+3. - BANK CLOSURES: whether banks closed during t to t+3; number of banks closed/liquidated in t to t+3. - OTHER FI CLOSURES: closures of financial institutions other than banks. - SHAREHOLDER PROTECTION: whether shareholders of closed institutions were made whole. - NATIONALIZATIONS, MERGERS, SALES TO FOREIGNERS: occurrence during t to t+5; for mergers, whether private shareholders injected capital; for sales to foreigners, number sold. - BANK RESTRUCTURING AGENCY and ASSET MANAGEMENT COMPANY: whether set up; for AMCs, whether centralized/decentralized, entity in charge, funding, type of assets transferred. - RECAPITALIZATION: whether banks recapitalized by government during t to t+3; methods collected include: (1) cash, (2) government bonds, (3) subordinated debt, (4) preferred shares, (5) purchase of bad loans, (6) credit lines, (7) assumption of bank liabilities, (8) ordinary shares, (9) other means. - RECAP COST (GROSS): targeted recapitalization level (percent of assets) and gross recapitalization cost (percent of GDP) during t to t+5 when available. - RECOVERY: whether government recovered part of recap cost. - RECOVERY PROCEEDS: recovery proceeds (percent of GDP) during t to t+5. - RECAP COST (NET): net recapitalization cost = gross recap cost minus recovery proceeds. Deposit insurance and depositor compensation variables: - DEPOSIT INSURANCE: whether explicit deposit insurance in place at start of crisis (ignores schemes introduced after first year). - FORMATION: year deposit insurance introduced. - COVERAGE LIMIT: coverage limit (local currency) at start of crisis; set to zero if none. - COVERAGE RATIO: coverage limit to per capita GDP at start of crisis; set to zero if none. - WERE LOSSES IMPOSED ON DEPOSITORS?: whether depositors of failed banks faced losses; if so, whether losses were severe. Macroeconomic policy variables during [t, t+3]: - MONETARY POLICY INDEX: +1 expansive if average % change in reserve money during [t, t+3] is between 1 to 5 percent higher than during [t-4, t-1]; -1 contractive if between 1 to 5 percent lower; 0 neither. Also report average change in reserve money (in percent) during [t, t+3]. - FISCAL POLICY INDEX: +1 expansive if average fiscal balance during [t, t+3] is less than -1.5 percent of GDP; -1 contractive if greater than 1.5 percent of GDP; 0 neither. Also report average fiscal balance (in percent of GDP) during [t, t+3]. - IMF PROGRAM: whether an IMF program was put in place around the time of the banking crisis, and the year. Outcome variables: - FISCAL COST (NET): net fiscal cost (percent of GDP) over [t, t+5]; gross fiscal costs and recovery proceeds also reported. Sources: Hoelscher and Quintyn (2003), Honohan and Laeven (2003), IMF Staff reports, national authorities. - OUTPUT LOSS: sum of deviations of actual real GDP from trend real GDP (trend based on pre-crisis growth up to year before crisis) expressed as percent of trend real GDP for [t, t+3]. Minimum of three pre-crisis real GDP growth observations required. --- ### Descriptive findings and key statistics (subset of 42 systemic crises) - Crisis coincidence: - Banking crisis coincides with a currency crisis in 55 percent of cases. - Banking crisis coincides with a sovereign debt crisis in 11 percent of cases. - Macroeconomic pre-crisis averages: - Average fiscal balance: -2.1 percent. - Average current account: -3.9 percent. - Average inflation: 137 percent. - Banking sector metrics: - Peak nonperforming loans: average about 25 percent; can be as high as 75 percent. - Government ownership of banking assets: about 31 percent on average. - Bank runs: 62 percent of crises experienced sharp reductions in total deposits. - Largest one-month drop in ratio of deposits to GDP averages about 11.2 percent for countries experiencing bank runs, and is as high as 26.7 percent in one case. - Credit booms: about 30 percent of crises preceded by credit booms. - Average annual growth in private credit to GDP prior to crisis: about 8.3 percent; as high as 34.1 percent (Chile). - Creditor rights: average about 1.8 (range 0 to 4). - Crisis containment usage (42 episodes subset): - Emergency liquidity support used in 71 percent of crises. - Blanket guarantees used in 29 percent of crises. - Deposit freezes used in 12 percent (5 cases): Argentina 1989 and 2001, Brazil 1990, Ecuador 1999, Uruguay 2002. - Bank holidays used in 10 percent; where used, average duration about 5 days. - Deposit freezes duration: up to 10 years in one case; about 41 months on average. - Blanket guarantees average duration: about 53 months. - Peak liquidity support average: about 28 percent of total deposits. - Correlation: about 30 percent positive correlation between extensive liquidity support and blanket guarantees. - Crisis resolution usage and outcomes: - Regulatory forbearance occurs in about 67 percent of crisis episodes. - Forbearance: 35 percent of cases involve banks allowed to continue despite being technically insolvent. - 73 percent of cases had prudential regulations suspended or not fully applied. - Large-scale government intervention occurs in 86 percent of cases. - Sales to foreigners occurred in about 51 percent of episodes. - Special bank restructuring agencies set up in 48 percent of crises. - Asset management companies (AMCs) set up in 60 percent of crises; AMCs tend to be centralized. - AMCs positively correlated with peak NPLs and fiscal costs by about 15 percent. - Recapitalization: - Occurred in 33 out of 42 episodes. - Methods observed (counts): cash (12), government bonds (14), subordinated debt (11), preferred shares (6), purchase of bad loans (7), credit lines (2), assumption of bank liabilities (3), ordinary shares (4). - Net recapitalization cost average: 6.0 percent of GDP (sample), with Indonesia up to 37.3 percent of GDP. - Deposit insurance: about half of systemic crisis countries had explicit deposit insurance at outbreak. - Losses imposed on depositors: minority of cases; episodes with depositor losses correlated with higher output losses (correlation about 8 percent). - Macroeconomic policy stance during crises: - Monetary policy tends to be fairly neutral in crises. - Fiscal stance tends to be expansive; average fiscal balance about -3.6 percent of GDP during initial years of a banking crisis. - IMF programs involved in about 52 percent of episodes. - Fiscal and real costs: - Fiscal costs (net of recoveries) average about 13.3 percent of GDP; can be as high as 55.1 percent of GDP. - Average recovery rate: 18.2 percent of gross fiscal costs. - Output losses (deviations from trend during first four years) average about 20 percent of GDP; range from 0 percent to 98 percent of GDP. --- ### Policy analysis and recommendations (from the section) - Immediate containment tools (do not require new institutions): - Suspension of convertibility of deposits (deposit freezes/bank holidays). - Regulatory capital forbearance. - Emergency liquidity support. - Government guarantee of depositors. - Choose containment tools based on crisis trigger: - Loss of depositor confidence: emergency liquidity loans, extension of government guarantees, or temporary suspension of depositor rights (bank holiday) to buy time. - Insolvency recognition: administrative intervention, temporary assumption of management, closure with subsidized compulsory sale of good assets to sound banks, assisted merger. - Wider macro/asset-market shocks: regulatory forbearance may be appropriate. - Key considerations during containment: - Credibility and creditworthiness of the government determine success of guarantees and liquidity measures. - Prior legal powers are critical for closure or administrative interventions. - Avoid privileging short-run stability at cost of long-run fiscal burden; excessive liquidity extension to insolvent banks can worsen outcomes. - Crisis resolution approaches and trade-offs: - Core approaches: conditional decentralized workouts, debt forgiveness, government-owned AMCs, government-assisted sales to new (often foreign) owners, government-assisted recapitalization. - Choice depends on source of crisis: - If information/relationship capital with existing owners/managers is valuable, preserving them may be optimal. - If insolvency stems from incompetence, corruption, or political misuse of banks, carve-outs and new ownership/management are preferable. - Inflation/currency devaluation as generalized debt relief may reduce fiscal burden but transfer costs to nominal creditors; requires macro policy trade-offs. - Design principles for recapitalization and restructuring: - Speed is essential: recognize losses, establish problem scale, ensure adequate capitalization quickly. - Successful recapitalization is selective, specifies clear quantifiable access rules, and enforces meaningful risk-based capital regulation. - Beware of moral hazard: avoid poorly designed generalized assistance; incorporate safeguards and conditionality. - AMCs often ineffective where political and legal constraints limit disposal of assets. - Targeted debt relief and corporate restructuring programs can be effective to relieve indebted corporates and households; these require public funds and good targeting with safeguards. - Research priorities identified: - Measure extent to which fiscal costs from accommodative measures (liquidity support, guarantees, forbearance) reduce output losses and speed recovery. - Identify resolution policies that mitigate moral hazard going forward. - Review and draw lessons from policy responses to the ongoing US and UK turmoil (preliminary analysis suggests many responses similar to past episodes). --- ### Global liquidity crisis of 2007-2008 — initial observations and comparison - Context and drivers: - Macro factors: prolonged excess global liquidity, relatively low interest rates post-2001, housing prices more than doubled in nominal terms between 2000 and mid-2006 (measured by Case-Shiller 20-city composite index percent change between January 2000 and peak July 2006). - Micro factors: "originate-and-distribute" model, securitization, mispricing of mortgage-backed securities, deterioration in underwriting standards, reliance by some banks on wholesale funding. - Early containment steps and chronology: - US: liquidity pressures, Fed lowered the discount rate by 0.5 percent on August 16, 2007, and accepted $17.2 billion in repurchase agreements for mortgage-backed securities; Term Securities Lending facility introduced March 2008 (lend up to $200 billion of Treasury securities for 28 days); expanded swap lines with other central banks. - UK: Northern Rock received Bank of England liquidity support on September 14, 2007; government blanket guarantee on September 17, 2007 (covering Northern Rock); Bank of England announced Special Liquidity Scheme on April 21, 2008 (accept broad range of MBS and swap for government paper for 1 year). - Major events: Bear Stearns assistance and sale in March 2008 (federal guarantees on liabilities); collapse of Lehman Brothers on September 14, 2008 (Chapter 11); Merrill Lynch acquisition by Bank of America on September 15, 2008. - Conservatorship of Fannie Mae and Freddie Mac on September 7, 2008: FHFA oversight; Treasury authority to inject capital in form of senior preferred shares and warrants; dividends suspended; nationalization-like measures. - Differences and similarities with historical crises: - Similarities: reliance on extensive liquidity support, use of guarantees, expansion of liquidity tools, recapitalizations, mergers and acquisitions, asset sales. - Differences: support extended to investment banks and nonbank intermediaries; limited sudden-stop capital flow dynamics in US/UK context so far; role of sovereign wealth funds injecting capital in recapitalizations. - Quantitative indicators (selected): - US banks’ profits declined from $35.2 to $5.8 billion (83.5 percent) during Q4 2007 versus prior year due to provisions for loan losses. - As of August 2008, subprime-related and other credit losses or writedowns by global financial institutions approx. 500 billion dollars (section earlier); another passage notes about $400 billion by June 2008. - Northern Rock recapitalization costs to UK government amounted to 0.20 percent of GDP (as of writing). - By end-August 2008 FDIC watch list: 117 troubled banks; largest commercial bank failure to date: IndiMac with US$ 19 billion in deposits (taken over July 2008). - Interim assessment: - Containment and resolution measures in US/UK broadly follow historical patterns; nationalization of Northern Rock is noteworthy. - Too early to evaluate ultimate effectiveness; further research and data needed. *Italic source attribution: _wp08224 - section II.* ### Introduction of capital controls and deposit freezes in Argentina in Dec. 2001 ### Introduction of capital controls and deposit freezes in Argentina in Dec. 2001 ### Summary of events and immediate impacts - Capital controls and deposit freezes introduced in Argentina in Dec. 2001 triggered liquidity problems at the two largest private banks: Banco Galicia Uruguay (BGU) and Banco Comercial (BC). - BGU and BC had combined assets of 20% of the total banking system. - In January 2002, BGU lost 15% of deposits. - BGU was intervened in February 2002 and later suspended. - A second wave of deposit withdrawals occurred in April 2002 following Uruguay’s downgrade from investment grade status. - By May 2002, deposit runs expanded to the public banks (Republica and Hipotecario), which together accounted for 40% of the system’s assets and were in weak condition with NPL’s of 39% as of 2001 (compared to 6% at private banks). ### Timeline and contagion dynamics - Dec. 2001: Argentina introduces capital controls and deposit freezes. - Jan. 2002: BGU loses 15% of deposits. - Feb. 2002: BGU intervened and later suspended. - Apr. 2002: Second wave of withdrawals after Uruguay downgrade. - May 2002: Runs reach public banks Republica and Hipotecario (40% of system assets). ### Bank-level exposures and asset quality - Combined assets of BGU and BC: 20% of total system assets. - Public banks (Republica and Hipotecario): 40% of system assets. - NPLs as of 2001: - Public banks: 39% - Private banks: 6% ### Systemic context and comparisons (selected cross-country excerpts) - Venezuela 1994: Insolvent banks accounted for 35% of financial system deposits; authorities intervened in 17 of 47 banks that held 50% of deposits, nationalized 9 banks and closed 7 others; government intervened in another 5 banks in 1995. - Vietnam 1997: Two of four large state-owned commercial banks—accounting for 51% of banking system loans—deemed insolvent; other two experienced significant solvency problems. Banking system nonperforming loans reached 18% in late 1998. - Yemen 1996: Banks suffered from extensive nonperforming loans and heavy foreign currency exposure; many banks technically insolvent. - Zambia 1995: Meridian Bank, accounting for 13% of commercial bank assets, became insolvent. - Zimbabwe 1995: Two of five commercial banks have high nonperforming loans. ### Table-based indicators for Argentina (selected metrics from Table 4) - Crisis date (year and month): Dec-01 - Currency crisis (Y/N) (t-1, t+1): Y - Year of currency crisis: 2002 - Sovereign debt crisis (Y/N) (t-1, t+1): Y - Year of sovereign debt crisis: 2001 - Initial conditions (at t-1): - Fiscal balance/GDP at t-1: -3.61% - Public sector Debt/GDP at t-1: 50.80% - Inflation at t-1: -0.73% - Net Foreign Assets/M2 at t-1: 24.16% - Deposits/GDP at t-1: 28.22% - GDP growth at t-1: -0.79% - Current Account/GDP at t-1: -3.15% - Peak NPLs (as % of total loans): 20.10% - Government-owned bank (% of assets) at t-1: 30.00% - Significant bank runs (Y/N): Y - Largest one-month % drop in deposits (>5%), [t, t+1]: 6.84% - Credit boom (Y/N): N - Annual growth in private credit to GDP (t-4, t-1] (in %): 6.10% - Creditor rights in year t: 1 - Containment phase — Deposit freeze (Y/N): Y ### Key implications and observed outcomes - High cross-border exposure of private banks (BGU, BC) to Argentina translated Argentina’s policy measures into solvency/liquidity stress in Uruguay. - Deposit losses can be rapid and severe (example: BGU lost 15% of deposits in a single month). - Public banks with large shares of system assets and high NPLs present amplification risk for systemic stress (Republica and Hipotecario: 40% of assets and 39% NPLs as of 2001). - Sovereign distress in the originating country (Argentina’s sovereign debt crisis in 2001) coincided with banking and currency crises in the region (Argentina: currency crisis in 2002; sovereign debt crisis in 2001). *Source: _wp08224 - Introduction of capital controls and deposit freezes in Argentina in Dec. 2001* ### Introduction of deposit freeze ### Introduction of deposit freeze ### Overview - Country columns: Chile; Colombia; Colombia; Cote d'Ivoire; Croatia; Czech Republic; Dominican Republic; Ecuador. - Crisis dates: Nov-81; Jul-82; Jun-98; 1988; Mar-98; 1996; Apr-03; Aug-98. - Deposit freeze introduction dates: (only Ecuador shows) 1999. - Deposit freeze duration (in months): Chile 120; Colombia (1) 12; Colombia (2) 29; Cote d'Ivoire (blank); Croatia (blank); Czech Republic (blank); Dominican Republic (blank); Ecuador 6. - Coverage of deposit freeze (time deposits only ? Y/N): Chile Y; Colombia (1) N; Colombia (2) N; Ecuador N (others blank). ### Containment measures: bank holidays, blanket guarantees, bank holidays timing - Bank holiday (Y/N): Chile N; Colombia (1) Y; Colombia (2) N; Cote d'Ivoire Y; Croatia N; Czech Republic N; Dominican Republic N; Ecuador Y. - Duration of bank holiday (in days): Colombia (1) 4; Cote d'Ivoire 5 (others blank). - Blanket guarantee (Y/N): all eight columns N. - Date of introduction / Date of removal / Duration of guarantee (in months): entries blank or 58 in one unspecified cell. ### Liquidity support and emergency lending - Liquidity support/emergency lending (Y/N): Chile Y; Colombia (1) Y; Colombia (2) N; Cote d'Ivoire Y; Croatia Y; Czech Republic Y; Dominican Republic Y; Ecuador Y. - Timing of first liquidity assistance: (one entry) Feb-90 (other timing entries: Mar-80; Feb-89; Jan-95; Apr-02; Nov-94; Jul-94; Early 1996 correspond to timing of first bank intervention). - Support different across banks? (Y/N): Chile N; Colombia (1) blank; Colombia (2) Y; Cote d'Ivoire Y; Croatia Y; Czech Republic blank; Dominican Republic blank; Ecuador blank. - Collateral required: some entries Y under various columns; exact column alignment unspecified in source. - Remunerated (Y/N): several Y entries in source under different columns. - If remunerated, interest at market rates (Y/N): at least one Y entry present. - Peak support (in % of deposits): Chile 15.60%; Colombia (1) 300.00%; Colombia (2) 4.15%; Cote d'Ivoire 24.30%; Croatia 13.90%; Czech Republic 5.00%; Dominican Republic 23.20%; Ecuador 22.90%. - Lowering of reserve requirements (Y/N): Chile Y; Colombia (1) N; Colombia (2) Y; Cote d'Ivoire N; Croatia Y; Czech Republic N; Dominican Republic N; Ecuador N. ### Resolution phase: interventions, closures, and restructurings - Forbearance (Y/N): Chile Y; Colombia (1) N; Colombia (2) N; Cote d'Ivoire Y; Croatia Y; Czech Republic N; Dominican Republic Y; Ecuador Y. - Banks not intervened despite being technically insolvent: Colombia (2) Y; Cote d'Ivoire Y; Croatia blank; Czech Republic Y; Dominican Republic Y; Ecuador Y (other blanks). - Prudential regulations suspended or not fully applied: Chile Y; Colombia (1) blank; Colombia (2) N; Cote d'Ivoire Y; Croatia Y; Czech Republic blank; Dominican Republic Y; Ecuador Y. - Large-scale government intervention (Y/N): Chile Y; Colombia (1) N; Colombia (2) N; Cote d'Ivoire Y; Croatia Y; Czech Republic N; Dominican Republic Y; Ecuador Y. - Institutions closed (% of banks assets): Chile 16%; Colombia (1) blank; Colombia (2) 0.62%; Cote d'Ivoire 0%; Croatia 11.00%; Czech Republic 0%; Dominican Republic small; Ecuador 24.00%. - Number of banks in t: Chile 214; Colombia (1) 177; Colombia (2) 205; Cote d'Ivoire 84; Croatia 17; Czech Republic 229; Dominican Republic 246; Ecuador 45. - Number of banks in t+3: Chile 203; Colombia (1) 165; Colombia (2) 143; Cote d'Ivoire 73; Croatia 14; Czech Republic 245; Dominican Republic 238; Ecuador 34. - Bank closures (Y/N): Chile Y; Colombia (1) Y; Colombia (2) Y; Cote d'Ivoire N; Croatia Y; Czech Republic N; Dominican Republic Y; Ecuador Y. - Number of bank closures during the period t to t+3: Chile 21; Colombia (1) 28; Colombia (2) 5; Cote d'Ivoire 0; Croatia 2; Czech Republic 0; Dominican Republic 41; Ecuador 16. - Other FI closures (Y/N): Chile Y; Colombia (1) Y; Colombia (2) N; Cote d'Ivoire N; Croatia N; Czech Republic N; Dominican Republic Y; Ecuador blank. - Shareholder protection (shareholders made whole? Y/N): Chile N; Colombia (1) N; Colombia (2) N; Cote d'Ivoire blank; Croatia N; Czech Republic blank; Dominican Republic N; Ecuador N. - Nationalizations (Y/N): Chile Y; Colombia (1) N; Colombia (2) N; Cote d'Ivoire Y; Croatia N; Czech Republic N; Dominican Republic N; Ecuador Y. - Mergers (Y/N): Chile Y; Colombia (1) Y; Colombia (2) Y; Cote d'Ivoire N; Croatia Y; Czech Republic blank; Dominican Republic Y; Ecuador N. - Did bank shareholders inject new capital? (Y/N): Colombia (1) Y; Colombia (2) Y; Cote d'Ivoire blank; Croatia Y; Dominican Republic blank; Ecuador Y (other blanks). - Sales to foreigners (Y/N): Chile Y; Colombia (1) N; Colombia (2) Y; Cote d'Ivoire N; Croatia Y; Czech Republic N; Dominican Republic Y; Ecuador Y. - Number of banks sold to foreigners during t to t+5: Chile 1; Colombia (1) 0; Colombia (2) blank; Cote d'Ivoire 0; Croatia 4; Czech Republic 0; Dominican Republic 3; Ecuador 4. - Bank restructuring agency (Y/N): Chile N; Colombia (1) N; Colombia (2) N; Cote d'Ivoire Y; Croatia Y; Czech Republic N; Dominican Republic N; Ecuador blank. - Asset management company (Y/N): Chile N; Colombia (1) N; Colombia (2) N; Cote d'Ivoire N; Croatia Y; Czech Republic N; Dominican Republic N; Ecuador Y. - Centralized (Y) / Decentralized (N) (for AMC): an entry Y and N present in source. - Recapitalization (Y/N): Chile N; Colombia (1) N; Colombia (2) Y; Cote d'Ivoire Y; Croatia Y; Czech Republic N; Dominican Republic Y; Ecuador Y. ### Recapitalization measures and costs - Recap measures types present in source: Cash; Government bonds; Subordinated debt; Preferred shares; Purchase of bad loans; Credit line; Assumption of bank liabilities; Ordinary shares (alignment by country in source). - Recap level (%): Croatia 8.00%; Dominican Republic 4.00% (other recap levels blank in source). - Recap cost (gross) (as % of GDP): Colombia (2) 0.28%; Cote d'Ivoire 9.58%; Croatia 0.95%; Dominican Republic 4.98%; Ecuador 2.31% (other blanks). - Recovery (Y/N): Colombia (2) N; Cote d'Ivoire N; Croatia Y; Dominican Republic N; Czech Republic N; Ecuador N (other blanks). - Recovery proceeds during period t to t+5: Cote d'Ivoire 0; Croatia 0; Dominican Republic 0.95%; Czech Republic 0; Ecuador 0.00. - Recap cost (net) (as % of GDP): Colombia (2) 0.28%; Cote d'Ivoire 9.58%; Croatia 0.00%; Dominican Republic 4.98%; Ecuador 2.31%. ### Deposit insurance - Deposit insurance (Y/N): Chile Y; Colombia (1) Y; Colombia (2) Y; Cote d'Ivoire Y; Croatia N; Czech Republic N; Dominican Republic N; Ecuador Y. - Formation: Chile 1979; Colombia (1) 1979; Colombia (2) 1979; Cote d'Ivoire 1979; Ecuador 1996 (other blanks). - Coverage limit (in local currency) at t: Chile Full; Colombia (1) Full; Colombia (2) 30000; Cote d'Ivoire 30000; Croatia 0; Czech Republic 0; Dominican Republic 0; Ecuador 5000. - Coverage ratio (coverage limit to GDP per capita) at t: Colombia (2) 4.04; Cote d'Ivoire 4.19; Croatia 0; Czech Republic 0; Dominican Republic 0; Ecuador 2.37. - Were losses imposed on depositors? (Y/N): Chile N; Colombia (1) Y; Colombia (2) N; Cote d'Ivoire Y; Croatia Y; Czech Republic N; Dominican Republic N; Ecuador N. - If yes, severe=1 and moderate=2: Colombia (1) 1; Cote d'Ivoire 1; Croatia 2. ### Macro policies and IMF engagement - Monetary policy index: Chile 1; Colombia (1) 1; Colombia (2) 0; Cote d'Ivoire -1; Croatia 0; Czech Republic 1; Dominican Republic -1; Ecuador 1. - Average change in reserve money during [t, t+3] (in %): Chile 324.16%; Colombia (1) 2046.85%; Colombia (2) blank; Cote d'Ivoire 36.28%; Croatia 18.80%; Czech Republic 1673.69%; Dominican Republic 939.63%; Ecuador 245.13%. - Fiscal policy index: Chile 1; Colombia (1) 1; Colombia (2) 1; Cote d'Ivoire 1; Croatia 1; Czech Republic -1; Dominican Republic 1; Ecuador 1. - Average fiscal balance during [t, t+3] (in %): Chile -6.82%; Colombia (1) -3.86%; Colombia (2) -2.24%; Cote d'Ivoire -7.23%; Croatia -3.02%; Czech Republic 0.27%; Dominican Republic -5.14%; Ecuador -3.09%. - IMF program (Y/N): Chile Y; Colombia (1) Y; Colombia (2) Y; Cote d'Ivoire Y; Croatia N; Czech Republic Y; Dominican Republic N; Ecuador Y. - IMF program put in place (year): Chile 1983; Colombia (1) 1990; Colombia (2) 1995; Cote d'Ivoire 2000; Czech Republic 1989; Ecuador 1996 (others blank). ### Outcome variables and output loss - Fiscal cost net (%GDP): Chile 55.10%; Colombia (1) 6.00%; Colombia (2) 2.00%; Cote d'Ivoire 9.58%; Croatia 2.65%; Czech Republic 0.00%; Dominican Republic 10.20%; Ecuador 13.90%. - Fiscal cost gross (%GDP): Chile 55.10%; Colombia (1) 6.00%; Colombia (2) 2.00%; Cote d'Ivoire 9.58%; Croatia 6.03%; Czech Republic 0.00%; Dominican Republic 13.20%; Ecuador 14.00%. - Recovery during period t to t+5: Chile 0; Colombia (1) 0; Colombia (2) 0; Cote d'Ivoire 0; Croatia 3.37%; Czech Republic 0.00%; Dominican Republic 3.00%; Ecuador 0.10%. - Output loss during period t to t+3: Chile 10.81%; Colombia (1) 10.70%; Colombia (2) 7.13%; Cote d'Ivoire 42.65%; Croatia 0.00%; Czech Republic 12.23%; Dominican Republic 0.00%; Ecuador 1.30%. ### Initial conditions and crisis context (selected indicators at t-1) - Currency crisis (Y/N) (t-1, t+1): Chile Y; Colombia (1) blank; Colombia (2) N; Cote d'Ivoire N; Croatia N; Czech Republic N; Dominican Republic Y; Ecuador Y. - Sovereign debt crisis (Y/N) (t-1, t+1): Dominican Republic Y; Ecuador Y (others N or blank). - Fiscal balance/GDP at t-1: Chile 4.99%; Colombia (1) -2.26%; Colombia (2) -3.95%; Cote d'Ivoire -7.19%; Croatia -2.01%; Czech Republic -1.29%; Dominican Republic -1.37%; Ecuador -3.02%. - Public sector Debt/GDP at t-1: Colombia (2) 30.19%; Croatia 26.70%; Czech Republic 12.47%; Dominican Republic 26.80%; Ecuador 61.75% (other blanks). - Inflation at t-1: Chile 31.24%; Colombia (1) 26.33%; Colombia (2) 17.68%; Cote d'Ivoire 7.48%; Croatia 5.01%; Czech Republic 107.86%; Dominican Republic 10.51%; Ecuador 30.67%. - Net Foreign Assets/M2 at t-1: Chile 42.17%; Colombia (1) 45.95%; Colombia (2) 31.12%; Cote d'Ivoire -35.05%; Croatia 28.67%; Czech Republic 32.51%; Dominican Republic -1.03%; Ecuador 8.35%. - Deposits/GDP at t-1: Chile 26.62%; Colombia (1) blank; Colombia (2) 24.78%; Cote d'Ivoire 36.14%; Croatia 20.57%; Czech Republic 41.42%; Dominican Republic 62.24%; Ecuador 34.80%; (another deposits/GDP entry 23.25% appears in source). - GDP growth at t-1: Chile 7.94%; Colombia (1) 2.28%; Colombia (2) 3.43%; Cote d'Ivoire -0.50%; Croatia 6.80%; Czech Republic 6.36%; Dominican Republic 4.43%; Ecuador 4.05%. - Current Account/GDP at t-1: Chile -6.35%; Colombia (1) -4.06%; Colombia (2) -5.39%; Cote d'Ivoire -14.93%; Croatia -12.61%; Czech Republic -0.09%; Dominican Republic -3.69%; Ecuador -3.02%. - Peak NPLs (as % of total loans): Chile 35.60%; Colombia (1) 4.10%; Colombia (2) 14.00%; Cote d'Ivoire 50.00%; Croatia 10.50%; Czech Republic 18.00%; Dominican Republic 9.00%; Ecuador 40.00%. - Government-owned bank (% of assets) at t-1: Chile 19.72%; Colombia (1) 57.67%; Colombia (2) 53.62%; Cote d'Ivoire 20.60%; Croatia 1.04%; Czech Republic 52.00%; Dominican Republic 15.50%; Ecuador 9.00%. - Significant bank runs (Y/N): Chile Y; Colombia (1) N; Colombia (2) N; Cote d'Ivoire N; Croatia Y; Czech Republic Y; Dominican Republic N; Ecuador Y. - Largest one-month % drop in deposits (>5%), [t, t+1]: Chile 8.48%; Cote d'Ivoire 6.11%; Croatia 5.67%; Dominican Republic 11.09% (other blanks). - Credit boom (Y/N): Chile Y; Colombia (1) N; Colombia (2) N; Cote d'Ivoire N; Croatia N; Czech Republic blank; Dominican Republic N; Ecuador N. - Annual growth in private credit to GDP (t-4, t-1] (in %): Chile 34.10%; Colombia (1) 5.40%; Colombia (2) 7.00%; Cote d'Ivoire 0.00%; Croatia 7.60%; Czech Republic blank; Dominican Republic 7.70%; Ecuador 9.40%. - Creditor rights in year t: Chile 2; Colombia (1) 0; Colombia (2) 0; Cote d'Ivoire 0; Croatia 3; Czech Republic 3; Dominican Republic 2; Ecuador 0. ### Containment phase: deposit freeze and bank holiday (selected) - Deposit freeze (Y/N): Chile N; Colombia (1) blank; Colombia (2) N; Cote d'Ivoire N; Croatia N; Czech Republic N; Dominican Republic N; Ecuador Y. - Introduction of deposit freeze: Ecuador 1999 (other columns blank). - Duration of deposit freeze (in months): Ecuador 6 (other columns blank). - Coverage of deposit freeze (time deposits only ? Y/N): Ecuador N (other columns blank). - Bank holiday (Y/N) during containment phase: Ecuador Y (others listed as N or blank). *Source: _wp08224 - Introduction of deposit freeze* ### Introduction ### _wp08224 - Introduction ### Banking-intervention measures (table summary — unnamed cases) - Duration of bank holiday (in days): 5 - Blanket guarantee (Y/N): N, N, N, N, N, N, N, Y - Date of introduction: Mid-96, Dec-98 - Date of removal: Jan-98, Jan-02 - Duration of guarantee (in months): 18, 37 - Previous explicit deposit insurance arrangement (Y/N): N, N, Y, N, Y, Y, N, Y - Timing of first bank intervention: Nov-81, Jul-82, 1988, Apr-98, Dec-95, Apr-03, Apr-98 - Liquidity support/emergency lending (Y/N): Y, Y, Y, Y, N, N, Y, Y - Support different across banks? (Y/N): N, Y, N - Collateral required: N - Remunerated (Y/N): Y, N - If remunerated, interest at market rates (Y/N): N, N - Peak support (in % of deposits): 124.00%, 14.90%, 9.20%, 59.00%, 1.70%, 2.30%, 61.60%, 15.30% - Lowering of reserve requirements (Y/N): Y, Y, N, N, Y, N, N, N ### Resolution phase (table summary — unnamed cases) - Forbearance (Y/N): Y, N, Y, Y, Y, N, Y, Y - Banks not intervened despite being technically insolvent: N, N, N, Y, N, N, N, Y - Prudential regulations suspended or not fully applied: Y, N, Y, Y, Y, N, Y, Y - Large-scale government intervention (Y/N): Y, Y, Y, Y, Y, Y, Y, Y - Institutions closed (% of banks assets): 20.00%, 0%, 9.90%, medium, 7.06%, 1.50%, 0.00%, 50.20% - Number of banks in t: 61, 39, 20, 60, 55, 14, 40 - Number of banks in t+3: 45, 27, 14, 43, 45, 11, 22 - Bank closures (Y/N): Y, N, Y, Y, Y, Y, N, Y - Number of bank closures during the period t to t+3: 8, 0, 12, 6, 11, 4, 0, 14 - Other FI closures (Y/N): Y, N, Y, Y, N, N, N, Y - Shareholder protection (shareholders made whole? Y/N): N, N, N, N, N, N - Nationalizations (Y/N): N, Y, Y, N, Y, N, N, Y - Mergers (Y/N): Y, N, Y, N, Y, Y, N, Y - Did bank shareholders inject new capital? (Y/N): Y, Y, Y, N, Y, N, N - Sales to foreigners (Y/N): Y, N, N, Y, Y, Y, N - Number of banks sold to foreigners during t to t+5: 1, 0, 0, 5, 5, 2, 0 - Bank restructuring agency (Y/N): N, N, Y, Y, Y, N, Y - Asset management company (Y/N): N, N, Y, Y, Y, Y, Y, Y - Centralized (Y) / Decentralized (N): Y, Y, Y, Y, Y, Y - Recapitalization (Y/N): Y, Y, Y, Y, Y, Y, N, Y ### Recapitalization measures and costs (unnamed cases) - Recap measures: Cash, Government bonds, Subordinated debt, Preferred shares, Purchase of bad loans, Credit line, Assumption of bank liabilities, Ordinary shares (presence varies across cases) - Recap level (%): 10.00%, 9.00% - Recap cost (gross) (as % of GDP): 34.33%, 1.87%, 4.26%, small, 3.20%, 0.98%, 1.90% - Recovery (Y/N): Y, N, Y, N, N, N, Y - Recovery proceeds during period t to t+5: 27.87%, 0, 1.56%, 0, 0, 0, 0.30% - Recap cost (net) (as % of GDP): 6.46%, 1.87%, 2.70%, small, 3.20%, 0.98%, 1.60% ### Deposit insurance and depositor outcomes (unnamed cases) - Deposit insurance (Y/N): N, N, Y, N, Y, Y, N, Y - Formation: 1988, 1997, 1994, 1998 (varies by case) - Coverage limit (in local currency) at t: 0, 0, 10000000, 0, 50000, 100000, 0, 7416 - Coverage ratio (coverage limit to GDP per capita) at t: 0, 0, 3.29, 0, 1.8, 0.75, 0, 3.81 - Were losses imposed on depositors? (Y/N): Y, N, N, Y, N, N, N, Y - If yes, severe=1 and moderate=2: 2, 1, 1 ### Macro policies during [t, t+3] (unnamed cases) - Monetary policy index: -1, 0, 0, -1, -1, -1, 1, 1 - Average change in reserve money during [t, t+3] (in %): 9.97%, 21.00%, 11.97%, -6.57%, 23.19%, 7.99%, 45.95% - Fiscal policy index: -1, 1, 1, 1, 1, 1, 1, 0 - Average fiscal balance during [t, t+3] (in %): 0.81%, -3.93%, -4.28%, -12.69%, -5.19%, -3.35%, -6.45%, -0.66% - IMF program (Y/N): Y, N, N, Y, N, N, Y, Y - IMF program put in place (year): 1983, 1985, 2004, 2000 ### Outcome variables (unnamed cases) - Fiscal cost net (%GDP): 16.80%, 5.00%, 2.54%, 25.00%, 6.90%, 5.80%, 20.80%, 16.26% - Fiscal cost gross (%GDP): 42.90%, 5.00%, 6.28%, 25.00%, 6.90%, 6.80%, 22.00%, 21.70% - Recovery during period t to t+5: 26.10%, 0, 3.74%, 0.00%, 0.00%, 1.00%, 1.20%, 5.44% - Output loss during period t to t+3: 92.35%, 15.11%, 33.52%, 0.00%, 0.00%, 15.51%, 6.49% ### Country-specific data: Estonia, Finland, Ghana, Indonesia, Jamaica, Japan, Korea, Latvia - Country name / Crisis date (year and month) / Currency crisis (Y/N) (t-1, t+1) / Year of currency crisis / Sovereign debt crisis (Y/N) (t-1, t+1) / Year of sovereign debt crisis - Estonia / Nov-92 / Y / 1991 / N - Finland / Sep-91 / N / (blank) / N - Ghana / 1982 / Y / 1983 / N - Indonesia / Nov-97 / Y / 1998 / N - Jamaica / Dec-96 / Y / 1995 / N - Japan / Nov-97 / N / (blank) / N - Korea / Aug-97 / Y / 1998 / N - Latvia / Apr-95 / N / (blank) / N - Initial conditions (at t-1) - Fiscal balance/GDP at t-1: 5.25%, 5.56%, -0.12%, -1.13%, 1.99%, -5.13%, 0.24%, -3.86% - Public sector Debt/GDP at t-1: 14.04%, 26.40%, 90.89%, 100.48%, 8.80%, 14.89% - Inflation at t-1: 4.88%, 16.79%, 6.04%, 25.55%, 0.60%, 4.93%, 26.27% - Net Foreign Assets/M2 at t-1: 57.63%, 12.73%, -0.06%, 21.58%, 19.07%, 1.62%, 15.62%, 36.32% - Deposits/GDP at t-1: 72.33%, 52.28%, 6.20%, 44.74%, 40.73%, 252.41%, 36.55%, 21.15% - GDP growth at t-1: -7.91%, 0.08%, -6.91%, 7.82%, 1.01%, 2.75%, 7.00%, 2.20% - Current Account/GDP at t-1: 59.70%, -4.91%, -0.32%, -2.91%, -4.37%, 1.42%, -4.14%, -3.61% - Peak NPLs (as % of total loans): 7.00%, 13.00%, 35.00%, 32.50%, 28.90%, 35.00%, 35.00%, 20.00% - Government-owned bank (% of assets) at t-1: 25.70%, 13.40%, 60.00%, 42.30%, 0.00%, 0.00%, 23.41%, 9.90% - Significant bank runs (Y/N): Y, N, Y, Y, N, N, Y, Y - Largest one-month % drop in deposits (>5%), [t, t+1]: 19.94%, 11.74%, 22.60%, 12.00%, 5.81% - Credit boom (Y/N): N (for listed cases) - Annual growth in private credit to GDP (t-4, t-1] (in %): 8.00%, -19.90%, 4.50%, -3.10%, 0.10%, 1.10% - Creditor rights in year t: 3, 1, 3, 2, 3, 3, 3 ### Containment phase and deposit freeze (Estonia, Finland, Ghana, Indonesia, Jamaica, Japan, Korea, Latvia) - Deposit freeze (Y/N): N, N, N, N, N, N, N, N - Introduction of deposit freeze (labelled): "Introduction of deposit freeze" (table header) - Duration of deposit freeze (in months): (blank entries) - Coverage of deposit freeze (time deposits only? Y/N): (blank entries) - Bank holiday (Y/N): N, N, N, N, N, N, N, N *Source: _wp08224 - Introduction* ### Introduction ### _wp08224 - Introduction ### Overview - Duration of bank holiday (in days): (data columns provided; values not listed in source excerpt) - Blanket guarantee (Y/N): N, Y, N, Y, Y, Y, Y, N - Date of introduction: Feb-93, Jan-98, Feb-97, Nov-97, Nov-97 - Date of removal: Dec-98, Jul-05, Mar-98, Apr-05, Dec-00 - Duration of guarantee (in months): 70, 78, 11, 89, 37 ### Crisis interventions and liquidity support - Previous explicit deposit insurance arrangement (Y/N): N, Y, N, N, N, Y, Y, N - Timing of first bank intervention: Sep-91, Jun-05, Nov-97, Dec-94, Apr-97, Oct-97, May-95 - Timing of first liquidity assistance: (data columns present; specific dates not listed in excerpt) - Liquidity support/emergency lending (Y/N): Y, Y, N, Y, Y, N, Y, N - Support different across banks? (Y/N): Y, N - Collateral required: (entries indicate "required" / "N" across columns) - Remunerated (Y/N): N, N, Y, Y - If remunerated, interest at market rates (Y/N): N, Y, Y - Peak support (in % of deposits): 31.64%, 5.50%, 0.00%, 53.80%, 12.40%, 0.40%, 28.90%, 3.01% - Lowering of reserve requirements (Y/N): Y, N, Y, N, N, Y, N, Y ### Resolution phase and bank closures - Forbearance (Y/N): Y, Y, Y, Y, N, Y, Y, N - Banks not intervened despite being technically insolvent: N, N, Y, N, N, N, Y, N - Prudential regulations suspended or not fully applied: Y, Y, Y, Y, N, Y, N, N - Large-scale government intervention (Y/N): Y, Y, Y, Y, Y, Y, Y, Y - Institutions closed (% of banks assets): 15.00%, 0%, 0%, 13.50%, 4.15%, 0%, 9.00%, 40.00% - Number of banks in t: 21, 519, 11, 238, 36, (blank), 59, 56 - Number of banks in t+3: 18, 347, 11, 165, 20, (blank), 31, 42 - Bank closures (Y/N): Y, N, N, Y, Y, N, Y, Y - Number of bank closures during the period t to t+3: 11, 0, 0, 66, 1, 0, 22, 14 - Other FI closures (Y/N): Y, N, N, N, Y, Y, Y - Shareholder protection (shareholders made whole? Y/N): N, Y, N, N, N, N, N - Nationalizations (Y/N): Y, Y, N, Y, Y, Y, Y, N - Mergers (Y/N): Y, Y, N, Y, Y, Y, Y, N - Did bank shareholders inject new capital? (Y/N): N, N, N, N, Y, Y - Sales to foreigners (Y/N): N, (blank), N, Y, Y, Y, Y, N - Number of banks sold to foreigners during t to t+5: 0, (blank), 0, (blank), 2, 1, 8, 0 ### Restructuring, asset management and recapitalization - Bank restructuring agency (Y/N): N, Y, N, Y, Y, Y, Y, N - Asset management company (Y/N): Y, Y, Y, Y, Y, Y, Y, N - Centralized (Y) / Decentralized (N): N, Y, Y, Y, Y, Y, Y - Recapitalization (Y/N): Y, Y, Y, Y, Y, Y, Y, N - Recapitalization measures (types indicated across columns): - Cash: Y (selected columns) - Government bonds: Y (selected columns) - Subordinated debt: Y, Y (selected columns) - Preferred shares: Y (selected columns) - Purchase of bad loans: Y (selected columns) - Credit line: (entries present) - Assumption of bank liabilities: Y (selected columns) - Ordinary shares: Y (selected columns) - Recapitalization level (%): 6.00%, 4.00% (appearing in specific columns) - Recap cost (gross) (as % of GDP): 1.26%, 8.63%, 6.00%, 37.30%, 13.90%, 6.61%, 19.31% (as listed) - Recovery (Y/N): Y, Y, N, N, Y, Y, Y - Recovery proceeds during period t to t+5: 0.27%, 1.72%, 0, 0, 4.95%, 0.09%, 3.50% - Recap cost (net) (as % of GDP): 0.99%, 6.91%, 6.00%, 37.30%, 8.95%, 6.52%, 15.81% ### Deposit insurance and depositor outcomes - Deposit insurance (Y/N): N, Y, N, N, N, Y, Y, N - Formation (year): 1969, 1971, 1996 (where provided) - Coverage limit (in local currency) at t: 0, Full, 0, 0, 0, Full, 20000000, 0 - Coverage ratio (coverage limit to GDP per capita) at t: 0, 0, 0, 0, 2.18, 0 - Were losses imposed on depositors? (Y/N): Y, N, N, N, N, N, N, Y - If yes, severity code: 1 (severe) indicated for applicable cases ### Macro policies during [t, t+3] - Monetary policy index: 0, -1, 0, 1, 0, 0, -1, 0 - Average change in reserve money during [t, t+3] (in %): 1.75%, 46.93%, 47.66%, 19.35%, 8.88%, 4.05% - Fiscal policy index: 0, 1, -1, 1, 1, 1, 1, 0 - Average fiscal balance during [t, t+3] (in %): -0.66%, -5.07%, -0.04%, -2.47%, -5.71%, -6.17%, -1.66%, -1.36% - IMF program (Y/N): Y, N, N, Y, N, N, Y, Y - IMF program put in place (year): 1993, 1998, 1998, 1993 (where provided) ### Outcomes and fiscal costs - Fiscal cost net (%GDP): 1.63%, 11.08%, 6.00%, 52.30%, 38.95%, 13.91%, 23.20%, 3.00% - Fiscal cost gross (%GDP): 1.90%, 12.80%, 6.00%, 56.80%, 43.90%, 14.00%, 31.20%, 3.00% - Recovery during period t to t+5: 0.27%, 1.72%, 0, 4.60%, 4.95%, 0.09%, 8.00%, 0.00% - Output loss during period t to t+3: 59.08%, 15.79%, 67.95%, 30.08%, 17.56%, 50.10% (values shown for select columns) ### Country-level initial conditions (selected countries shown in excerpt) - Country name list in excerpt: Lithuania, Malaysia, Mexico, Nicaragua, Norway, Paraguay, Philippines, Russia - Crisis date (year and month): Dec-95, Jul-97, Dec-94, Aug-00, Oct-91, May-95, Jul-97, Aug-98 - Currency crisis (Y/N) (t-1, t+1): N, Y, Y, N, N, N, Y, Y - Year of currency crisis: 1998 (appears for specific countries), 1995, 1998, 1998 (where indicated) - Sovereign debt crisis (Y/N) (t-1, t+1): N, N, N, N, N, N, N, Y - Initial fiscal balance/GDP at t-1: -4.22%, 1.98%, -2.46%, -3.30%, 2.54%, 2.73%, -0.18%, -16.96% - Public sector Debt/GDP at t-1: 8.00%, 35.16%, 27.34%, 191.31%, 28.92%, 15.80%, (blank), 52.49% - Inflation at t-1: 45.10%, 3.34%, 8.01%, 9.28%, 4.36%, 18.31%, 7.14%, 11.05% - Net Foreign Assets/M2 at t-1: 39.63%, 23.20%, 18.12%, -14.10%, 10.34%, 38.86%, 19.03%, 9.47% - Deposits/GDP at t-1: 17.43%, 119.51%, 26.82%, 37.02%, 54.44%, 27.68%, 48.61%, 14.59% - GDP growth at t-1: -9.77%, 10.00%, 1.95%, 7.00%, 1.93%, 3.73%, 5.85%, 1.40% - Current Account/GDP at t-1: -3.86%, -4.36%, -5.80%, -24.90%, 2.50%, -2.02%, -0.18%, 0.00% - Peak NPLs (as % of total loans): 32.20%, 30.00%, 18.90%, 12.70%, 16.36%, 8.10%, 20.00%, 40.00% - Government-owned bank (% of assets) at t-1: 48.00%, 9.93%, 28.16%, 0.00%, 43.68%, 48.02%, 27.23%, 32.98% - Significant bank runs (Y/N): Y, Y, Y, N, N, Y, N, Y - Largest one-month % drop in deposits (>5%), [t, t+1]: 6.26%, 6.03%, 14.00%, 7.68%, 21% (where indicated) - Credit boom (Y/N): N, Y, N, N, Y, Y, N (as shown) - Annual growth in private credit to GDP (t-4, t-1] (in %): 7.10%, 22.50%, 2.90%, 17.60%, 17.70%, 9.50% (where provided) - Creditor rights in year t: 1, 3, 0, 4, 2, 1, 1, 1 ### Containment and deposit freezes - Deposit freeze (Y/N): N for all columns shown - Introduction of deposit freeze / Duration / Coverage of deposit freeze / Time deposits only? (Y/N): (data columns present; entries indicate no deposit freezes in excerpt) - Bank holiday (Y/N): N for all columns shown *Source: _wp08224 - Introduction (IMF PDF excerpt provided)* ### Introduction ### _wp08224 - Introduction ### Bank holidays, guarantees, and immediate containment - Blanket guarantee introduced: N, Y, Y, Y, N, N, N, N - Date of introduction: Jan-98, Dec-93, Jan-01, Jul-95 - Date of removal: Aug-05, Jan-03, Jul-02, Jun-96 - Duration of guarantee (in months): 91, 109, 14, 11 - Duration of bank holiday (in days): (table entries present but not labeled by country in the source excerpt) - Deposit freeze (Y/N): N, N, N, N, N, N, N, Y, N, N - Introduction of deposit freeze: 2002 (associated entry in table) - Duration of deposit freeze (in months): 36 - Coverage of deposit freeze (time deposits only? Y/N): Y - Bank holiday (Y/N): N, N, N, N, N, N, N, Y, N, N ### Liquidity support and emergency lending - Liquidity support/emergency lending (Y/N): N, Y, Y, Y, Y, Y, N, Y - Timing of first liquidity assistance: Aug-00, Sep-97, Sep-98 (selected entries) - Support different across banks? (Y/N): N, N, Y, N, Y - Collateral required: (entry shows "Collateral required" with some blank and "N" for one column) - Remunerated (Y/N): Y, Y (selected entries) - If remunerated, interest at market rates (Y/N): Y, N (selected entries) - Peak support (in % of deposits): 4.60%, 12.20%, 67.60%, 9.60%, 6.20%, 20.80%, 2.50%, 31.50% - Lowering of reserve requirements (Y/N): Y, N, N, N, N, Y, N, Y ### Resolution phase, closures, and forbearance - Forbearance (Y/N): Y, Y, Y, N, Y, Y, N, Y - Banks not intervened despite being technically insolvent: Y, N, N, N, N, N, Y - Prudential regulations suspended or not fully applied: Y, Y, Y, Y, Y, N, Y - Large-scale government intervention (Y/N): Y, Y, Y, Y, Y, Y, N, Y - Institutions closed (% of banks assets): 15.00%, 0.00%, 0%, 0%, 1.00%, 23.00%, 1.00%, 4.00% - Number of banks in t: 28, 47, 52, 12, 164, 34, 1003, 1476 - Number of banks in t+3: 14, 43, 37, 6, 153, 22, 925, 1318 - Bank closures (Y/N): Y, N, N, N, Y, Y, Y, Y - Number of bank closures during the period t to t+3: 14, 0, 0, 0, 2, 9, 26, 399 - Other FI closures (Y/N): N, N, Y, N, Y (selected entries) - Shareholder protection (shareholders made whole? Y/N): N, N, N, N, N - Nationalizations (Y/N): Y, Y, Y, N, Y, N, N, Y - Mergers (Y/N): N, Y, Y, N, Y, N, N, Y - Did bank shareholders inject new capital? (Y/N): Y (selected entries) - Sales to foreigners (Y/N): N, N, Y, N, Y, N, N, N - Number of banks sold to foreigners during t to t+5: 0, 0, 4, 0, 0, 0, 0 ### Restructuring mechanisms and recapitalization - Bank restructuring agency (Y/N): 0, Y, Y, N, Y, N, N, Y - Asset management company (Y/N): Y, Y, N, Y, N, N, N, Y - Centralized (Y) / Decentralized (N): Y, Y, N, Y - Recapitalization (Y/N): Y, Y, Y, N, Y, Y, N, N - Recapitalization measures observed: Cash, Government bonds, Subordinated debt, Preferred shares, Purchase of bad loans, Credit line, Assumption of bank liabilities, Ordinary shares (entries present across columns) - Recap level (%): 9.00%, 9.00%, 8.00% (selected entries) - Recap cost (gross) (as % of GDP): 1.70%, 16.40%, 3.80%, 2.61%, 1.22%, 0.20% - Recovery (Y/N): Y, Y, Y, Y, N, N - Recovery proceeds during period t to t+5: 0.20%, 11.30%, 1.30%, 2.00%, 0.00%, 0 - Recap cost (net) (as % of GDP): 1.50%, 5.10%, 2.50%, 0.61%, 1.22%, 0.20% ### Deposit insurance and depositor treatment - Deposit insurance (Y/N): N, N, Y, N, Y, N, Y, N - Formation (years listed in table): 1986, 1961, 1963 (selected entries) - Coverage limit (in local currency) at t: 0, 0, Full, 0, Full, 0, 10000, 0 - Coverage ratio (coverage limit to GDP per capita) at t: 0, 0, 0, 0, 3.22, 0 - Were losses imposed on depositors? (Y/N): Y, N, N, N, N, N, N, Y - If yes, severity code (severe=1 and moderate=2): 2, 2 (selected entries) ### Macro policies and fiscal outcomes - Monetary policy index: 0, -1, 1, 0, 0, -1, -1, 1 - Average change in reserve money during [t, t+3] (in %): -2.78%, 22.03%, 17.63%, 5.57%, 24.13%, 7.03%, 47.21% - Fiscal policy index: 1, 0, 1, 1, 0, -1, 1, 0 - Average fiscal balance during [t, t+3] (in %): -5.05%, -1.28%, -4.77%, -3.80%, -0.65%, -0.02%, -2.75%, -1.32% - IMF program (Y/N): N, N, Y, N, N, N, Y, Y - IMF program put in place (year): 1995, 1998, 1999 (selected entries) ### Fiscal cost, recovery, and output loss - Fiscal cost net (%GDP): 2.90%, 5.10%, 18.00%, 12.57%, 0.60%, 10.00%, 13.20%, 6.00% - Fiscal cost gross (%GDP): 3.10%, 16.40%, 19.30%, 13.61%, 2.70%, 12.90%, 13.20%, 6.00% - Recovery during period t to t+5: 0.20%, 11.30%, 1.30%, 1.04%, 2.10%, 2.90%, 0, 0 - Output loss during period t to t+3: 50.04%, 4.25%, 0.00%, 0.00%, 0.00%, 0.00%, 0.00%, 0.00% (selected entries) ### Country snapshots (selected entries from table) - Sri Lanka - Crisis date (year and month): 1989 - Currency crisis (Y/N) (t-1, t+1): N - Fiscal balance/GDP at t-1: -8.59% - Public sector Debt/GDP at t-1: 108.72% - Inflation at t-1: 15.10% - Net Foreign Assets/M2 at t-1: 5.80% - Deposits/GDP at t-1: 22.01% - GDP growth at t-1: 2.30% - Current Account/GDP at t-1: -0.23% - Peak NPLs (as % of total loans): 35.00% - Government-owned bank (% of assets) at t-1: 71.39% - Significant bank runs (Y/N): Y - Largest one-month % drop in deposits (>5%), [t, t+1]: 7.51% - Sweden - Crisis date (year and month): Sep-91 - Currency crisis (Y/N) (t-1, t+1): Y - Fiscal balance/GDP at t-1: 3.39% - Inflation at t-1: 10.94% - Net Foreign Assets/M2 at t-1: 4.79% - Deposits/GDP at t-1: 40.62% - GDP growth at t-1: 1.01% - Current Account/GDP at t-1: -2.57% - Peak NPLs (as % of total loans): 13.00% - Government-owned bank (% of assets) at t-1: 23.20% - Significant bank runs (Y/N): Y - Largest one-month % drop in deposits (>5%), [t, t+1]: 5.56% - Thailand - Crisis date (year and month): Jul-97 - Currency crisis (Y/N) (t-1, t+1): N - Fiscal balance/GDP at t-1: 2.40% - Public sector Debt/GDP at t-1: 14.15% - Inflation at t-1: 4.77% - Net Foreign Assets/M2 at t-1: 25.13% - Deposits/GDP at t-1: 76.91% - GDP growth at t-1: 5.90% - Current Account/GDP at t-1: -7.89% - Peak NPLs (as % of total loans): 33.00% - Government-owned bank (% of assets) at t-1: 17.09% - Significant bank runs (Y/N): N - Turkey - Crisis date (year and month): Nov-00 - Currency crisis (Y/N) (t-1, t+1): Y - Fiscal balance/GDP at t-1: -14.97% - Public sector Debt/GDP at t-1: 51.31% - Inflation at t-1: 68.79% - Net Foreign Assets/M2 at t-1: 17.84% - Deposits/GDP at t-1: 37.28% - GDP growth at t-1: -3.37% - Current Account/GDP at t-1: -0.55% - Peak NPLs (as % of total loans): 27.60% - Government-owned bank (% of assets) at t-1: 35.00% - Significant bank runs (Y/N): N - Ukraine - Crisis date (year and month): 1998 - Currency crisis (Y/N) (t-1, t+1): Y - Fiscal balance/GDP at t-1: -5.56% - Public sector Debt/GDP at t-1: 29.88% - Inflation at t-1: 10.12% - Net Foreign Assets/M2 at t-1: -1.68% - Deposits/GDP at t-1: 6.81% - GDP growth at t-1: -2.99% - Current Account/GDP at t-1: -2.66% - Peak NPLs (as % of total loans): 62.40% - Government-owned bank (% of assets) at t-1: 12.23% - Significant bank runs (Y/N): N - United Kingdom - Crisis date (year and month): Aug-07 - Currency crisis (Y/N) (t-1, t+1): N - Fiscal balance/GDP at t-1: -2.56% - Public sector Debt/GDP at t-1: 43.04% - Inflation at t-1: 2.78% - Net Foreign Assets/M2 at t-1: 1.40% - Deposits/GDP at t-1: 139.66% - GDP growth at t-1: 2.91% - Current Account/GDP at t-1: -3.62% - Peak NPLs (as % of total loans): 4.80% - Government-owned bank (% of assets) at t-1: 0.00% - Significant bank runs (Y/N): N - United States - Crisis date (year and month): Aug-07 - Currency crisis (Y/N) (t-1, t+1): N - Fiscal balance/GDP at t-1: -2.61% - Public sector Debt/GDP at t-1: 60.10% - Inflation at t-1: 2.57% - Net Foreign Assets/M2 at t-1: 0.98% - Deposits/GDP at t-1: 72.01% - GDP growth at t-1: 2.87% - Current Account/GDP at t-1: -6.15% - Peak NPLs (as % of total loans): 36.30% - Government-owned bank (% of assets) at t-1: 0.00% - Significant bank runs (Y/N): N - Uruguay - Crisis date (year and month): Jan-02 - Currency crisis (Y/N) (t-1, t+1): Y - Fiscal balance/GDP at t-1: -0.22% - Inflation at t-1: 3.59% - Net Foreign Assets/M2 at t-1: 27.15% - Deposits/GDP at t-1: 75.00% - GDP growth at t-1: -3.38% - Current Account/GDP at t-1: -2.87% - Peak NPLs (as % of total loans): 24.00% - Government-owned bank (% of assets) at t-1: 40.90% - Significant bank runs (Y/N): Y - Venezuela - Crisis date (year and month): Jan-94 - Currency crisis (Y/N) (t-1, t+1): Y - Fiscal balance/GDP at t-1: -2.92% - Inflation at t-1: 45.94% - Net Foreign Assets/M2 at t-1: 55.29% - Deposits/GDP at t-1: (entry blank in excerpt) - GDP growth at t-1: 0.28% - Current Account/GDP at t-1: -3.33% - Peak NPLs (as % of total loans): 35.00% - Government-owned bank (% of assets) at t-1: 9.80% - Significant bank runs (Y/N): Y - Largest one-month % drop in deposits (>5%), [t, t+1]: 9.12% - Vietnam - Crisis date (year and month): fall 1997 - Currency crisis (Y/N) (t-1, t+1): N - Fiscal balance/GDP at t-1: -2.36% - Inflation at t-1: 4.59% - Net Foreign Assets/M2 at t-1: 24.66% - Deposits/GDP at t-1: 8.33% - GDP growth at t-1: 9.34% - Current Account/GDP at t-1: -9.86% - Peak NPLs (as % of total loans): (entry blank in excerpt) - Government-owned bank (% of assets) at t-1: 92.00% - Significant bank runs (Y/N): N - Largest one-month % drop in deposits (>5%), [t, t+1]: 14.06% *Source: _wp08224 - Introduction* ### Introduction of bank holiday ### Introduction of bank holiday ### Bank holiday incidence and duration - Bank holiday (Y/N) entries across episodes: N Y Y Y N N N N N N - Date of introduction (examples shown): Sep-92; Aug-97; Dec-00; Sep-07 - Duration of bank holiday (in days) reported: 5 - Duration of bank holiday (in days) across 4 observations: Mean = 4.750; Std. Dev. = 0.500; Minimum = 4; Maximum = 5 (Table 6) ### Blanket guarantee and guarantees duration - Blanket guarantee (Y/N) across episodes: mix of Y and N as listed (e.g., N, Y, Y, Y, N, N, N, N, N, N) - Duration of guarantee (in months) examples: 46; 89; 43 - Duration of guarantee (summary statistics): Number of crises = 14; Mean = 53.071; Std. Dev. = 33.992; Minimum = 11; Maximum = 109 (Table 6) ### Liquidity support and emergency lending - Liquidity support/emergency lending (Y/N) across episodes: N Y Y Y Y N N Y Y N - Timing of first liquidity assistance (examples): Sep-91; Mar-97; Nov-97; 1995; Sep-07; Mar-08; Feb-02; Jan-94; Fall 1998 - Support different across banks? (Y/N) entries include Y and N - Collateral required entries include N and Y - Collateral provided remunerated (Y/N) entries include Y - If remunerated, interest at market rates (Y/N) entries include Y - Peak support (in % of deposits) examples: 3.10%; 9.40%; 25.90%; 22.16%; 16.30%; 2.06%; 31.00%; 31.20%; 5.20% - Peak liquidity support (fraction of deposits) summary: Number of crises = 41; Mean = 0.277; Std. Dev. = 0.497; Minimum = 0; Maximum = 3 (Table 6) - Collateral required for liquidity provision (summary): Number of observations = 15; Mean = 0.467; Std. Dev. = 0.516; Minimum = 0; Maximum = 1 (Table 6) - Collateral provided is remunerated (summary): Number = 13; Mean = 0.846; Std. Dev. = 0.376; Minimum = 0; Maximum = 1 (Table 6) - If remunerated, interest at market rates (summary): Number = 11; Mean = 0.636; Std. Dev. = 0.505; Minimum = 0; Maximum = 1 (Table 6) ### Resolution phase, forbearance and regulatory forbearance - Forbearance (Y/N) across episodes: Y N Y N Y N N N N Y (examples) - Banks not intervened despite being technically insolvent: Y N N N Y N N N Y (examples) - Prudential regulations suspended or not fully applied: Y N Y N Y N N Y Y (examples) - Large-scale government intervention (Y/N) across episodes: Y Y Y Y Y N N Y Y Y (examples) - Forbearance summary: Number of crises = 42; Mean = 0.667; Std. Dev. = 0.477; Minimum = 0; Maximum = 1 (Table 6) - Prudential regulations suspended or not fully applied (summary): Number = 37; Mean = 0.730; Std. Dev. = 0.450; Minimum = 0; Maximum = 1 (Table 6) - Banks not intervened despite being technically insolvent (summary): Number = 37; Mean = 0.351; Std. Dev. = 0.484; Minimum = 0; Maximum = 1 (Table 6) - Large-scale government intervention summary: Number of crises = 42; Mean = 0.857; Std. Dev. = 0.354; Minimum = 0; Maximum = 1 (Table 6) ### Bank closures, consolidation and restructurings - Bank closures (Y/N) across episodes: N N Y Y Y N N Y Y Y (examples) - Number of bank closures during the period t to t+3 (examples): 0; 0; 1; 12; 48; N; 5; 12; 5 - Institutions closed (% of banks assets) examples: 0%; 0%; 2.00%; 8.00%; 2.00%; 0%; 0%; 18.83%; 23.00%; 2.00% - Fraction of financial institutions closed (summary): Number = 39; Mean = 0.083; Std. Dev. = 0.117; Minimum = 0; Maximum = 0.500 (Table 6) - Bank closures (summary): Number of crises = 42; Mean = 0.667; Std. Dev. = 0.477; Minimum = 0; Maximum = 1 (Table 6) - Mergers (Y/N) across episodes: N Y Y Y N Y N N N Y (examples) - Sales to foreigners (Y/N) across episodes: N Y Y N N N Y Y (examples) - Number of banks sold to foreigners during t to t+5 examples: 0; 3; 2; 0; 0; 2; 5 ### Recapitalization and recapitalization costs - Recapitalization (Y/N) across episodes: Y Y Y Y N Y Y Y Y Y (examples) - Recap measures observed include Cash, Government bonds, Subordinated debt, Preferred shares, Purchase of bad loans, Assumption of bank liabilities, Ordinary shares - Recap level (%) examples: 8.00%; 8.50%; 8.00%; 10% - Recap level (%) summary: Number = 13; Mean = 0.078; Std. Dev. = 0.020; Minimum = 0.040; Maximum = 0.100 (Table 6) - Recap cost (gross) (as % of GDP) examples: 3.60%; 1.85%; 18.80%; 24.50%; 0.20%; 6.18%; 5.59%; 5.00% - Recap cost to government (gross) (fraction of GDP) summary: Number = 32; Mean = 0.078; Std. Dev. = 0.096; Minimum = 0.002; Maximum = 0.373 (Table 6) - Recovery (Y/N) instances: N Y N Y N N (examples) - Recovery proceeds during t to t+5 examples: 0; 0.36%; 0.00%; 1.16%; 0.00%; 0.00% - Recap cost (net) (as % of GDP) examples: 3.60%; 1.49%; 18.80%; 24.50%; 0.20%; 5.02%; 5.59%; 5.00% - Recap cost to government (net) (fraction of GDP) summary: Number = 32; Mean = 0.060; Std. Dev. = 0.079; Minimum = 0; Maximum = 0.373 (Table 6) ### Deposit insurance, coverage and depositor outcomes - Deposit insurance (Y/N) across episodes: Y N N Y Y Y Y Y Y N (examples) - Formation years (examples): 1987; 1983; 1998; 2001; 1933; 2002; 1985 - Coverage limit (in local currency) at t examples: 100000; 0; 0; Full; 1200; 35000; 100000; 100000; 250000; 0 - Coverage ratio (coverage limit to GDP per capita) at t examples: 7.18; 0; 0; 0.59; 1.9; 2.26; 1.4; 0.96; 0 - Deposit insurance (summary): Number of crises = 42; Mean = 0.524; Std. Dev. = 0.505; Minimum = 0; Maximum = 1 (Table 6) - Coverage limit to per capita GDP (summary): Number = 35; Mean = 1.142; Std. Dev. = 1.730; Minimum = 0; Maximum = 7.180 (Table 6) ### Losses imposed on depositors and selected episodes - Were losses imposed on depositors? (Y/N) across episodes: N N Y N Y N N N Y N (examples) - Severity coding where provided: severe=1 and moderate=2 - Table of episodes with losses imposed on depositors (selected entries): - Argentina 1989: Large — BONEX plan converted time deposits into long-term bonds at an exchange rate below the prevailing on the market. - Argentina 2001: Large — Dollar deposits were converted into domestic currency at ARG$1.4, which was below the prevailing market rate. - Bolivia 1994: Minor to Moderate — Large depositors of the 2 closed banks received as compensation non-interest bearing bonds. - Chile 1981: Minor to Moderate — In 1983, depositors at banks forced into liquidation were paid only 70 percent of face value. - Cote d'Ivoire 1988: Large — In the liquidation of BDN, only 85 percent of depositors were compensated fully. - Ecuador 1998: Large — Frozen deposits were significantly eroded by accelerating inflation and depreciation of the currency and some payments to depositors are still pending (despite the blanket guarantee). - Estonia 1992: Large — Depositors of Tartu commercial bank were only partially paid. - Latvia 1995: Large — With the collapse of Baltija Bank the government compensated depositors for LVL 500 ($1000) per depositor (LVL 200 in 1995 and LVL 100 over next 3 years). - Lithuania 1995: Minor to Moderate — Depositors of Litimpex Bank had their deposits turned into equity; depositors of Innovation Bank received some cash (Lt.4000 in 1997 and Lt.4000 in 1998 per person) and other non-tradable notes; public sector deposits were written off. - Russia 1998: Minor To Moderate — Some depositors (those whose savings were not transferred to Sberbank) sustained losses; exchange rate used was less than half of market rate. - Thailand 1997: Minor To Moderate — Depositors of the closed finance companies received certificates yielding below market interest rates. - Ukraine 1998: Large — Depositors were not fully compensated. - Venezuela 1994: Minor to Moderate — Depositors at Banco Latino with more than 10m Bolivars received long-term non-negotiable bonds with interest rate below market for the amount exceeding the 10m. ### Macro policy responses during crises - Monetary policy index entries across episodes include -1, 0, 1 (examples) - Average change in reserve money during [t, t+3] examples: 15.39%; 21.63%; 12.95%; 33.99%; 33.26%; 17.37%; 79.32%; 24.17% - Monetary policy index (summary): Number = 40; Mean = -0.050; Std. Dev. = 0.815; Minimum = -1; Maximum = 1 (Table 6) - Change in reserve money (rate) summary: Number = 35; Mean = 1.681; Std. Dev. = 4.562; Minimum = -0.070; Maximum = 20.47 (Table 6) - Fiscal policy index examples: 1 and -1 - Average fiscal balance during [t, t+3] examples: -7.67%; -7.33%; -2.51%; -10.55%; -2.00%; 0.04%; -1.64%; -2.74% - Fiscal index summary: Number = 40; Mean = 0.600; Std. Dev. = 0.709; Minimum = -1; Maximum = 1 (Table 6) - Fiscal balance (share of GDP) summary: Number = 40; Mean = -0.036; Std. Dev. = 0.030; Minimum = -0.127; Maximum = 0.008 (Table 6) - IMF program put in place (Y/N) across episodes: mix of Y and N; summary: Number = 42; Mean = 0.524; Std. Dev. = 0.505; Minimum = 0; Maximum = 1 (Table 6) ### Crisis outcomes: fiscal costs, recovery and output loss - Fiscal cost net (%GDP) examples: 5.00%; 0.20%; 34.80%; 30.70%; 0.00%; 10.83%; 12.50%; 10.00% - Gross fiscal cost examples: 5.00%; 3.60%; 43.80%; 32.00%; 0.00%; 20.00%; 15.00%; 10.00% - Fiscal cost net (summary): Number = 40; Mean = 0.130; Std. Dev. = 0.133; Minimum = 0; Maximum = 0.551 (Table 6) - Gross fiscal cost (summary): Number = 40; Mean = 0.157; Std. Dev. = 0.150; Minimum = 0; Maximum = 0.568 (Table 6) - Recovery during period t to t+5 examples: 0%; 3.40%; 9.00%; 1.30%; 0%; 9.17%; 2.50%; 0.00% - Recovery of fiscal expense (summary): Number = 40; Mean = 0.027; Std. Dev. = 0.048; Minimum = 0; Maximum = 0.261 (Table 6) - Output loss during period t to t+3 examples: 2.20%; 30.60%; 97.66%; 5.35%; 0.00%; 28.79%; 9.62%; 19.72% - Output loss (summary): Number = 40; Mean = 0.201; Std. Dev. = 0.260; Minimum = 0; Maximum = 0.977 (Table 6) ### Descriptive statistics of initial conditions (selected) - Number of crises = 42 - Start year of banking crisis: Mean = 1995; Std. Dev. = 6.100; Minimum = 1980; Maximum = 2007 (Table 5) - Currency crisis (Y/N): Mean = 0.548; Std. Dev. = 0.504; Min = 0.000; Max = 1.000 - Sovereign debt crisis (Y/N): Mean = 0.119; Std. Dev. = 0.328; Min = 0.000; Max = 1.000 - Fiscal balance/GDP: Mean = -0.021; Std. Dev. = 0.045; Min = -0.170; Max = 0.056 - Debt/GDP: Number = 33; Mean = 0.464; Std. Dev. = 0.395; Min = 0.080; Max = 1.913 - Inflation (Number = 41): Mean = 1.371; Std. Dev. = 4.862; Minimum = -0.007; Maximum = 24.772 - Net Foreign Assets/M2: Mean = 0.174; Std. Dev. = 0.189; Min = -0.351; Max = 0.576 - Deposits/GDP: Mean = 0.491; Std. Dev. = 0.454; Min = 0.062; Max = 2.524 - GDP growth: Mean = 0.024; Std. Dev. = 0.045; Min = -0.098; Max = 0.100 - Peak NPLs (fraction of total loans): Number = 40; Mean = 0.252; Std. Dev. = 0.155; Min = 0.040; Max = 0.750 - Government-owned banks (fraction of total assets): Mean = 0.309; Std. Dev. = 0.245; Min = 0.000; Max = 0.920 - Bank runs (Y/N): Mean = 0.619; Std. Dev. = 0.491; Min = 0.000; Max = 1.000 - Largest 1-month drop in deposits-to-GDP: Number = 26; Mean = 0.112; Std. Dev. = 0.058; Min = 0.056; Max = 0.267 - Credit boom (Y/N): Number = 33; Mean = 0.303; Std. Dev. = 0.467; Min = 0.000; Max = 1.000 - Annual growth in private credit to GDP prior to crisis: Number = 33; Mean = 0.083; Std. Dev. = 0.098; Min = -0.199; Max = 0.341 - Creditor rights: Number = 41; Mean = 1.780; Std. Dev. = 1.129; Min = 0.000; Max = 4.000 *Source: _wp08224 - Introduction of bank holiday (IMF).* ### References ### _wp08224 - References ### Crisis resolution, restructuring, and policy frameworks - Calomiris, Charles, Daniela Klingebiel, and Luc Laeven, 2003, “Financial Crisis Policies and Resolution Mechanisms: A Taxonomy from Cross-Country Experience,” in Patrick Honohan and Luc Laeven (eds.), Systemic Financial Distress: Containment and Resolution, Chapter 2, Cambridge: Cambridge University Press. - Claessens, Stijn, Daniela Klingebiel, and Luc Laeven, 2003, “Financial Restructuring in Banking and Corporate Sector Crises: What Policies to Pursue?” In Michael Dooley and Jeffrey Frankel (eds.), Managing Currency Crises in Emerging Markets, University of Chicago Press, Chapter 6, pp. 147-80. Also NBER Working Paper No. 8386. - Claessens, Stijn, Daniela Klingebiel, and Luc Laeven, 2005, “Crisis Resolution, Policies, and Institutions: Empirical Evidence,” in Patrick Honohan and Luc Laeven (eds.), Systemic Financial Distress: Containment and Resolution, Chapter 6, pp. 169-96, Cambridge: Cambridge University Press. - Hoelscher, David, and Marc Quintyn, 2003, “Managing Systemic Banking Crises.” IMF Occasional Paper No. 224. (Washington: International Monetary Fund). - Honohan, Patrick, and Daniela Klingebiel, 2000, “Controlling the Fiscal Costs of Banking Crises.” Policy Research Working Paper 2441. Washington, D.C.: World Bank. - Honohan, Patrick, and Luc Laeven, 2005 (eds.), Systemic Financial Crises: Containment and Resolution. Cambridge, U.K.: Cambridge University Press. - Klingebiel, Daniela, 2000, “The Use of Asset Management Companies in the Resolution of Banking Crises.” Working Paper 2294. Washington, D.C.: World Bank. - Laeven, Luc, and Fabian Valencia, 2008, “The Use of Blanket Guarantees in Banking Crises.” Mimeo. (Washington: International Monetary Fund). - Lindgren, Carl-Johan, 2003, “Pitfalls in Managing Closures of Financial Institutions,” in Patrick Honohan and Luc Laeven (eds.), Systemic Financial Distress: Containment and Resolution, Chapter 3, Cambridge: Cambridge University Press. - Lindgren, Carl-Johan, Gillian Garcia, and Matthew I. Saal, 1996, Bank Soundness and Macroeconomic Policy. (Washington: International Monetary Fund). ### Country case studies and crisis narratives - Batunanggar, Sukarela. 2002, “Indonesia’s Banking Crisis Resolution: Lessons and The Way Forward.” Mimeo, Center for Central Banking Studies (CCBS), Bank of England. - Collyns, Charles, and G. Russell Kincaid, 2003, “Managing Financial Crises: Recent Experience and Lessons for Latin America.” IMF Occasional Paper, No. 217. (Washington: International Monetary Fund). - Drees, Burkhard, and Ceyla Pazarbasioglu, 1998, “The Nordic Banking Crisis: Pitfalls in Financial Liberalization.” IMF Occasional Paper 161. (Washington: International Monetary Fund). - Enoch, Charles, Barbara Baldwin, Olivier Frécaut, and Arto Kovanen, 2001, “Indonesia: Anatomy of a Banking Crisis. Two Years of Living Dangerously 1997-1999.” IMF Working Paper No. 01/52 (Washington: International Monetary Fund). - Nakaso, Hiroshi, 2001, “The Financial Crisis in Japan During the 1990s: How the Bank of Japan Responded and the Lessons Learnt.” Bank For International Settlements Paper No. 6. - Sanhueza, Gonzalo, 2001, “Chilean Banking Crisis of the 1980s: Solutions and Estimation of the Costs.” Working Paper 104. Central Bank of Chile, Santiago. - Jácome, Luis, 2004, “The Late 1990s Financial Crisis in Ecuador: Institutional Weaknesses, Fiscal Rigidities, and Financial Dollarization at Work.” IMF Working Paper 04/12, (Washington: International Monetary Fund). - International Monetary Fund, 2003, “Uruguay-Third Review Under the Stand-By Arrangement and Request for Modification and Waiver of Applicability of Performance Criteria-Report on the 2002 Banking Crisis.” (Washington: International Moneary Fund). - International Monetary Fund, 2008, “United Kingdom: 2008 Article IV Consultation.” Staff Report No. 08/271. (Washington: International Monetary Fund). ### Empirical studies, metrics, and databases - Caprio, Gerard, and Daniela Klingebiel, 1996, “Bank Insolvencies: Cross-Country Experience.” Policy Research Working Paper No.1620. Washington, D.C.: World Bank. - Caprio, Gerard, Daniela Klingebiel, Luc Laeven, and Guillermo Noguera, 2005, “Appendix: Banking Crisis Database,” in Patrick Honohan and Luc Laeven (eds.), Systemic Financial Crises: Containment and Resolution. Cambridge, U.K.: Cambridge University Press. - Demirguc-Kunt, Asli, Edward Kane, and Luc Laeven (eds.), 2008, Deposit Insurance around the World: Issues of Design and Implementation (Cambridge, MA: MIT Press). - Djankov, Simeon, Caralee McLiesh, and Andrei Shleifer, 2007, “Private credit in 129 countries.” Journal of Financial Economics, 84, pp. 299-329. - Dooley, Michael, and Jeffrey Frankel, 2003 (eds.), Managing Currency Crises in Emerging Markets. Proceedings of a National Bureau for Economic Research conference. Chicago, Ill.: University of Chicago Press. - Frankel, Jeffrey, and Andrew Rose, 1996, “Currency Crashes in Emerging Markets: An Empirical Treatment,” Journal of International Economics, Vol. 41, pp. 351-66. - Sturzenegger, Federico, and Jeromin Zettelmeyer, 2006, Debt Defaults and Lessons from a Decade of Crises. Table 1 in Chapter 1, Cambridge: MIT Press. - Valencia, Fabian, 2008, “Banks’ Precautionary Capital and Credit Crunches.” Mimeo. (Washington: International Monetary Fund). - World Bank, Global Development Finance 2002, Appendix on Commercial Debt Restructuring. Washington, D.C.: World Bank. ### Financial sector structure, regulation, and ownership - Bathia, Ashok, 2007, “New Landscape, New Challenges: Structural Change and Regulation in the U.S. Financial Sector.” IMF Working Paper 07/195 (Washington: International Monetary Fund. - Beim, David, and Charles Calomiris, 2001, Emerging Financial Markets. Appendix to Chapter 1. New York: McGraw-Hill/Irwin Publishers. - La Porta, Rafael, Florencio Lopez-De-Silanes, Andrei Shleifer, 2002, “Government Ownership of Banks.” Journal of Finance, Vol. 57, pp. 265–301. ### IMF and other institutional analyses - International Monetary Fund, 2000, “A Strategy for Resolving Current Banking Problems and Preventing Banking Crisis.” (Washington: Internationa, Monetary Fund). - Hoelscher, David, and Marc Quintyn, 2003, “Managing Systemic Banking Crises.” IMF Occasional Paper No. 224. (Washington: International Monetary Fund). - Collyns, Charles, and G. Russell Kincaid, 2003, “Managing Financial Crises: Recent Experience and Lessons for Latin America.” IMF Occasional Paper, No. 217. (Washington: International Monetary Fund). *Reference list from _wp08224 - References* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08224.pdf_