We ask how deposit insurance systems and ownership of banks affect the degree of market discipline on banks' risk-taking. Market discipline is determined by the extent of explicit deposit insurance, as well as by the credibility of non-insurance of groups of depositors and other creditors....

Several studies indicate that financial liberalization contributes to the likelihood of a financial crisis. We focus on banking crises and argue that they are most likely to occur after some degree, but not full, liberalization. Using a recently updated dataset for financial reforms in 48...

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of 2010 provides for a wide variety of new regulatory and supervisory initiatives with the goal to promote a safer and sounder banking system. Our paper puts Dodd-Frank into a historical perspective, identifies its key...

Explicit deposit insurance is a two-edged sword with respect to risk taking. High explicit coverage creates incentives to shift risk to a deposit insurance fund or taxpayers; low explicit coverage may be associated with strong implicit insurance reflecting lack of credibility of non-insurance....

This study analyzes the causes of the market discipline failure in the recent financial crisis. We argue that the most important market failure of informativeness was that large financial institutions had the incentive to remain opaque strategically so that outside investors could not assess...

The effective organization of cross-border banking is likely to include both subsidiaries and branches. The choice from a bank's point of view depends on the nature of financial services provided, the nature of the market served, tax systems and the types of risk the bank faces in home and host...

Purpose: The recurrence of banking crises throughout the 1980s and 1990s, and in the more recent 2008-09 global financial crisis, has led to an expanding empirical literature on crisis explanation and prediction. This paper provides an analytical review of proxies for and important determinants...

Rapid credit growth seems to precede many episodes of banking crises in both advanced and emerging market economies including the recent global financial crisis of 2007-09. All episodes of high credit growth are not followed by crisis, however. We argue that credit growth is more likely to lead...

We extend much research that has been devoted to the effects of the EMU on international trade by introducing monetary regime variables in bilateral export equations with the objective of capturing the effects on trade of changes in monetary regimes relative the pure EMU effects. In addition, we...

The objectives of this paper are, first, to analyze whether banks' risk-taking can be explained by factors contributing to implicit guarantees and by factors associated with banks' business models. Second, it analyzes how risk-taking associated with these factors has changed from a period before...