Post-Crisis Bank Behavior: Lessons From Mercosur

January 1, 2010

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Sarah Sanya, and Montfort Mlachila. Post-Crisis Bank Behavior: Lessons From Mercosur, (USA: International Monetary Fund, 2010) accessed September 18, 2024

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

Summary

Did the occurrence of systemic banking crises in the 1990s and 2000s significantly alter the behavior of banks in the Mercosur? The objective of this paper is to answer this question by analyzing changes in bank behavior after crises in the Mercosur region. To our knowledge, this is the first paper to apply the convergence methodology-which is common in the growth literature-to post-crisis bank behavior. Using a panel dataset of commercial banks during the period 1990-2006, we analyze the impact of crises on four sets of financial indicators of bank behavior-profitability, maturity preference, credit supply, and risk. The paper finds that most indicators of bank behavior, such as profitability, in fact revert to previous or more normal levels. However, a key finding of the paper is that private sector intermediation is significantly reduced for prolonged periods of time and that high levels excess liquidity persist well after the crisis.

Subject: Bank credit, Banking, Banking crises, Commercial banks, Credit, Financial crises, Money, Systemic crises

Keywords: Activity regulation, Asia and Pacific, Bank behavior, Bank characteristic, Bank credit, Bank crisis, Bank efficiency, Bank fundamentals, Banking crises, Banking system, Banks asset portfolio, Commercial bank, Convergence, Credit, Credit supply, Deposit money bank, Gross domestic product, Mercosur, Money bank, Private sector, Private sector credit, Return on assets, Systemic crises, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/001
Stock No:

WPIEA2010001
ISBN:

9781451961614
ISSN:

1018-5941

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