We study sovereign external debt crises over the past 200 years, with a focus on creditor losses, or "haircuts". Our sample covers 327 sovereign debt restructurings with external private creditors over 205 default spells since 1815. Creditor losses vary widely (from none to 100%), but the...

Business cycles imply liquidity risks for banks. This paper explores how these risks influence bank lending over the cycle. With forward-looking banks, lending cycles, credit booms and busts, or suppressed and highly fragile bank systems can emerge, depending on the magnitude of liquidity risks....

We quantify the sovereign-bank doom loop by using the 1999 Marmara earthquake as an exogenous shock leading to an increase in Turkey's default risk. Our theoretical model illustrates that for banks with higher exposure to government securities, a higher sovereign default risk implies lower net...

The paper provides redesigned approaches in bank risk control, as result of the latest credit crisis. The study's framework links the credit crunch causes to Basel II (BII) and Capital Requirements Directive (CRD) implementation in SMBs. A threefold approach applies: • primary data (June...

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. By comparison,...