{
  "title": "The Impact of Conflict and Political Instability on Banking Crises in Developing Countries",
  "publication": "IMF Working Papers, February 28, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2020/02/28/the-impact-of-conflict-and-political-instability-on-banking-crises-in-developing-countries-49047",
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  "summary": "While there is an extensive literature examining the economic impact of conflict and political instability, surprisingly there have been few studies on their impact on the probability of banking crises.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Conflicts and political instability are associated with higher probability of systemic banking crises.\n- The duration of a conflict is positively associated with rising probability of a banking crisis.\n- Conflicts and political instability in one country can have negative spillover effects on neighboring countries’ banking systems.\n- The primary channel of transmission from conflict or political instability to banking crises is the occurrence of fiscal crises following a conflict or political instability."
    },
    {
      "heading": "Analysis and methodology (as described)",
      "content": "- The paper investigates whether rising conflict and political instability globally over the past several decades led to increased occurrence of banking crises in developing countries.\n- Empirical approach draws on econometric analysis using Logit models to examine the occurrence of a banking crisis and systemic crises indicators.\n- Focus includes banking liquidity shortage, banking turmoil, and interactions with terms of trade and international trade."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Banking, Banking crises, Commercial banks, Econometric analysis, Financial crises, Financial institutions, International trade, Logit models, Systemic crises, Terms of trade\n- Keywords: banking crises; banking crises in year; banking crisis; banking liquidity shortage; banking turmoil; Commercial banks; conflict; countries matter; economic growth; experiencing banking crisis; fiscal crises; fiscal crisis; Global; government crisis; liquidity shortage; Logit models; occurrence of a banking crisis; occurrence of banking crisis; political instability; start of a banking crisis; state fragility index; Sub-Saharan Africa; systemic banking crisis; Systemic crises; terms of trade; Terms of trade; WP\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2020/02/28/the-impact-of-conflict-and-political-instability-on-banking-crises-in-developing-countries-49047"
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    "Authors: Ali Compaoré, Montfort Mlachila, Rasmané Ouedraogo, Sandrine Sourouema",
    "Published: February 28, 2020",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513530055.001",
    "Conflicts and political instability are associated with higher probability of systemic banking crises.",
    "The duration of a conflict is positively associated with rising probability of a banking crisis.",
    "Conflicts and political instability in one country can have negative spillover effects on neighboring countries’ banking systems.",
    "The primary channel of transmission from conflict or political instability to banking crises is the occurrence of fiscal crises following a conflict or political instability.",
    "The paper investigates whether rising conflict and political instability globally over the past several decades led to increased occurrence of banking crises in developing countries.",
    "Empirical approach draws on econometric analysis using Logit models to examine the occurrence of a banking crisis and systemic crises indicators.",
    "Focus includes banking liquidity shortage, banking turmoil, and interactions with terms of trade and international trade.",
    "Subject: Banking, Banking crises, Commercial banks, Econometric analysis, Financial crises, Financial institutions, International trade, Logit models, Systemic crises, Terms of trade",
    "Keywords: banking crises; banking crises in year; banking crisis; banking liquidity shortage; banking turmoil; Commercial banks; conflict; countries matter; economic growth; experiencing banking crisis; fiscal crises; fiscal crisis; Global; government crisis; liquidity shortage; Logit models; occurrence of a banking crisis; occurrence of banking crisis; political instability; start of a banking crisis; state fragility index; Sub-Saharan Africa; systemic banking crisis; Systemic crises; terms of trade; Terms of trade; WP",
    "**Working Paper**"
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