{
  "title": "Credit Reversals",
  "publication": "IMF Working Papers, April 23, 2021",
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  "summary": "This paper studies episodes in which aggregate bank credit contracts alongside expanding economic activity—credit reversals. Using data for 179 countries during 1960‒2017, the paper finds that reversals are a relatively common phenomenon--on average, they occur every five years.",
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    {
      "heading": "Summary and main findings",
      "content": "- The paper studies episodes in which aggregate bank credit contracts alongside expanding economic activity—credit reversals.\n- Using data for 179 countries during 1960‒2017, the paper finds that reversals are a relatively common phenomenon—on average, they occur every five years.\n- By comparison, banking crises take place every eight years on average.\n- Credit reversals and banking crises appear related:\n  - Reversals become more likely in the aftermath of banking crises.\n  - The likelihood of crises drops following reversals.\n- In terms of foregone economic activity, reversals are shown to be very costly, at about two-thirds of the costs of banking crises after taking into account their relative frequencies."
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    {
      "heading": "Data and scope",
      "content": "- Countries covered: 179\n- Sample period: 1960‒2017"
    },
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      "heading": "Key statistics and metrics",
      "content": "- Average frequency of credit reversals: every five years.\n- Average frequency of banking crises: every eight years.\n- Relative cost: reversals cost about two-thirds of the costs of banking crises when accounting for relative frequencies.\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/2021/04/23/credit-reversals-50354"
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    "Authors: Francisco F. Vazquez",
    "Published: April 23, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513582641.001",
    "The paper studies episodes in which aggregate bank credit contracts alongside expanding economic activity—credit reversals.",
    "Using data for 179 countries during 1960‒2017, the paper finds that reversals are a relatively common phenomenon—on average, they occur every five years.",
    "By comparison, banking crises take place every eight years on average.",
    "Credit reversals and banking crises appear related:",
    "In terms of foregone economic activity, reversals are shown to be very costly, at about two-thirds of the costs of banking crises after taking into account their relative frequencies.",
    "Countries covered: 179",
    "Sample period: 1960‒2017",
    "Average frequency of credit reversals: every five years.",
    "Average frequency of banking crises: every eight years.",
    "Relative cost: reversals cost about two-thirds of the costs of banking crises when accounting for relative frequencies.",
    "**Working Paper**"
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