Showing 51 - 60 of 592
The last decade has witnessed the development of a vast literature devoted to the study of several phenomena like banking crises or episodes of vulnerability and distress, characterized by inadequate capitalization, impairment of the asset quality and of the credit institutions' rating. The...
Persistent link: https://www.econbiz.de/10005010501
The object of this paper is to develop an Early Warning System of Macro Vulnerability for several Latin American countries based on previous work of Kaminsky, Lizondo and Reinhart (1997) and Kaminsky (1998). We build a composite leading indicator that signals macroeconomic vulnerability, showing...
Persistent link: https://www.econbiz.de/10005076817
Early warning systems (EWSs) are subject to restrictions that apply to exchange rates in general: fundamentals matter but their influence is small and unstable. Keeping this in mind, five lessons emerge : First, EWSs have robust forecasting power and thus help policy-makers to prevent crises....
Persistent link: https://www.econbiz.de/10005082727
Currency crises creates extremely high costs in economies. The depletion of foreign exchange reserves, a severe recession and negative GDPgrowth rates are observe in the countries where the currency crises are occurred. There seems to be great benefits from identifying reliable early warning...
Persistent link: https://www.econbiz.de/10005056621
Fiscal problems have long been considered a central feature of financial--that is, currency, debt, and banking--crises. This paper addresses four questions: What are the fiscal causes of crises? Which fiscal vulnerability indicators help to predict crises? Can fiscal variables explain the...
Persistent link: https://www.econbiz.de/10005590938
We propose a measure of the probability of crises associated with an aggregate indicator, where the percentage of false alarms and the proportion of missed signals can be combined to give an appreciation of the vulnerability of an economy. In this perspective, the important issue is not only to...
Persistent link: https://www.econbiz.de/10005677577
The paper provides an empirical analysis of aggregate banking system ratios during systemic banking crises. Drawing upon a wide cross-country dataset, we utilize parametric and nonparametric tests to assess the power of these ratios to discriminate between sound and unsound banking systems. We...
Persistent link: https://www.econbiz.de/10005768721
Many estimates of early-warning-system (EWS) models of currency crisis have reported incorrect standard errors because of serial correlation in the context of panel probit regressions. This paper documents the magnitude of the problem, proposes and tests a solution, and applies it to previously...
Persistent link: https://www.econbiz.de/10005768958
Since 1999, the IMF's staff has been tracking several early-warning-system (EWS) models of currency crisis. The results have been mixed. One of the long-horizon models has performed well relative to pure guesswork and to available non-model-based forecasts, such as agency ratings and private...
Persistent link: https://www.econbiz.de/10005768990
This paper investigates empirically the relevance of external, domestic, and financial weaknesses as well as trade and financial linkages in inducing financial crises for a sample of 61 emerging market and industrial countries. A panel probit estimation finds these economic indicators to be...
Persistent link: https://www.econbiz.de/10005769104