This paper examines the monitoring role of Japanese banks during the 1990s’ banking crisis. The results show a negative association between bank ties and shareholder wealth for a sample of Japanese M&A acquirers in 1990-2004. Further results implicate that banks arranged the acquisitions to coinsure target debts. The overall evidence highlights that banks restructured their loans to improve the...

Measuring the dynamic relationship between banking and industries with systemic importance has attracted much attention after the recent financial crisis. This paper examines the dynamic conditional correlations and volatility spillover using three popular multivariate GARCH models in the twelve-year period (from the beginning of 2005 to the beginning of 2016) among the fourteen systemically im...

Stress in financial markets influences economic agents’ behavior by creating uncertainty and changing the expectations. Critical financial stress can lead to financial crisis. Financial crises are among the events always present in the world economy. Iran is not an exception. This paper aims to study the impact of financial stresses on Iran’s per capita GDP. By using ARDL (Auto Regressive Distr...

The present study investigates for the first time the efficiency of Malaysian banking sector around the Asian financial crisis 1997. The efficiency estimates of individual banks are evaluated by using the Data Envelopment Analysis (DEA) approach. To examine the robustness of the estimated efficiency scores under various alternatives and to differentiate how efficiency scores vary with changes i...

Numerous conferences organized in the aftermath of the financial crisis of 1997–98 offered analyses of what went wrong in the crisis countries. The immediacy of the crisis prompted a number of reform proposals directed toward reducing the risk of future crises. However, now that the crisis has abated, reform appears to be much lower on most political agendas, and the progress that countries are...

Since the 1997 " Asian Financial Crisis" there has been a continual drum roll of domestic currency devaluation, banking system collapses, stock market bubble burstings, and classical defined recession that moved from the periphery to the heart of the capitalist system. At the touch of this dark wand of crisis all the Brave New Economy talk of the 1990s which projected infinite, conflict-free in...

Historically, the banking multiplier has been in a range of 4 to 100, with 25% to 1% reserve ratios at most layers of the banking system encompassing the majority of its range in recent centuries. Here it is shown that multipliers over 1 000 can occur from a new mechanism in banking. This new multiplier uses a default insurance note to insure an outstanding loan in order to return the value of ...

This paper proposes an original and unified toolbox to evaluate financial crisis Early Warning Systems (EWS). It presents four main advantages. First, it is a model free method which can be used to asses the forecasts issued from different EWS (probit, logit, markov switching models, or combinations of models). Second, this toolbox can be applied to any type of crisis EWS (currency, banking, so...