There were hardly any banking crises between 1939 and 1971, so their later reemergence came as a surprise. Central bank supervisors responded practically by discovering and encouraging the adoption of current best practice in risk management by individual banks, without much theoretical input, whereas economists have mostly focused on models which abstract from default. But default is central t...

The instability of international financial markets, as exhibited by persistent periodic crises, is an important issue for all market participants. This paper presents an alternative agent-based network theory of financial crises derived from recent developments in complexity science, and applies it to short-term currency crises. The theory, despite being parsimonious, is capable of generating c...

Often, systemic banking crises initiate from one or more banks and affect countries by rapid spreading in the banking network, financial markets and economy of countries. According to Reinhart & Rogoff (2009) in the book titled "This time is Different," financial crises are pointed as an equal opportunity menace for high-income countries and emerging markets. Although The International Mo...

This appendix describes how we derive our new semiannual measure of financial distress for a sample of advanced economies for the period 1967 to 2007. As discussed in the paper, our approach follows others in the literature in relying on qualitative evidence about financial conditions in each country. A key feature of our approach is the use of a consistent real-time source of this information....