Most studies in the aftermath of the global financial crisis of 2008 have found the credit-to-GDP gap as the best single leading indicator for systemic banking crises associated with excessive credit growth, in a univariate setting. However there have been several critics levied on the...

In this paper, we investigate the growing prominence of credit in the systemic banking crisis prediction literature. Through the application of the signal extraction model and multivariate probit panel regression, we evaluate the performance of the absolute change in credit-to-GDP ratio as an...